Within a single economy, moving money has become nearly cost-free and effectively instant. The moment a payment must cross a border and a currency, however, the picture changes entirely. Transactions become slower, more expensive, and—across a growing number of corridors—harder to complete at all. For businesses trading between emerging markets and Europe, this is not a marginal inconvenience but a structural cost that determines who they can pay, how quickly, and on what terms.

This problem has proven remarkably resistant to progress. Understanding why it persists—and how institutional liquidity providers such as FinchTrade are beginning to address it—matters for any payment service provider or treasury team that settles across borders.

The Problem: Friction That Has Barely Moved in 20 Years

The clearest measure of the problem is also the most stubborn. According to the Bank for International Settlements (BIS), the global average cost of sending USD 200 in remittances stood at USD 12, or 6 percent, in 2024. Twenty years earlier, it was USD 18, or 9 percent. That represents roughly three percentage points of improvement over two decades—a pace that would be considered unremarkable in virtually any other domain of financial technology. It also leaves the global average twice the level that United Nations Sustainable Development Goal 10.c targets for remittance corridors by 2030: below 3 percent.

The mechanism behind this stagnation is correspondent banking: the network of bilateral relationships through which banks settle payments in currencies and jurisdictions where they have no direct presence. The system works, but it is slow, opaque, and increasingly reluctant to serve difficult markets. BIS data shows that active correspondent banking relationships declined between 20 and 45 percent across regions between 2011 and 2022. Africa was among the hardest hit, experiencing a decline of roughly 40 percent. This contraction is widely attributed to derisking—the practice by which large international banks terminate or restrict correspondent relationships, often in emerging-market corridors, to reduce exposure to anti-money-laundering and counter-terrorism-financing enforcement risk and associated compliance costs.

This retreat is not evenly distributed. As banks withdraw, the corridors they leave behind become more concentrated, more expensive, and more fragile. African corridors settled through correspondent banking commonly carry costs of 7 to 8 percent, and settlement can take three to five days. For a European business paying a supplier in Lagos or Accra, that combination of cost and delay directly affects working capital, supplier relationships, and the fundamental question of whether a given trade is viable.

The Market Shift: Why Alternatives Are Emerging Now

Two developments have converged simultaneously, and together they make alternative settlement infrastructure credible.

The first is that the incumbent network is contracting while demand is not. As correspondent relationships thin out, the market has been actively seeking other ways to move value across borders. The BIS notes that public-sector cross-border and cross-currency initiatives nearly doubled between 2020 and 2024, rising from approximately 20 to roughly 40. This period overlaps with the G20's 2020 designation of enhancing cross-border payments as a formal priority, which catalyzed coordinated work across the BIS Committee on Payments and Market Infrastructures, the Financial Stability Board, and the IMF to identify frictions and benchmark improvement targets. Private infrastructure has advanced in parallel. When a settlement method retreats from the markets that need it most, the incentive to build a more efficient alternative becomes structural.

The second force is regulatory. For much of the past decade, the principal obstacle to institutional adoption of blockchain-based settlement was not the technology itself but the absence of a clear legal framework surrounding it. That is changing. The European Union's Markets in Crypto-Assets (MiCA) regulation, the emergence of dedicated stablecoin legislation in the United States, and established Swiss frameworks for virtual asset service providers have begun to provide institutions with what they need most: regulatory certainty. Stablecoin settlement is no longer a grey area to be navigated cautiously; it is becoming a regulated activity that compliance teams can assess against defined standards.

Together, these forces reframe the question. It is no longer whether alternatives to correspondent banking are viable, but rather which model of alternative infrastructure an institution should rely upon.

The Solution: Liquidity as the Foundation, Settlement as the Application

It is tempting to characterize the alternative simply as "stablecoins," but that description misses the core issue. A stablecoin is merely what moves between two parties. What actually determines whether a cross-border payment can be executed quickly and at a fair price is the availability of liquidity in both the sending and receiving currencies at the precise moment the payment needs to settle. Without deep liquidity, a fast rail is only theoretically fast.

This is why the institutional liquidity desk sits at the center of the model rather than at its periphery. FinchTrade is a Swiss-regulated OTC desk and crypto-fiat liquidity provider serving payment service providers, electronic money institutions, exchanges, and treasury teams. Its over-the-counter desk supplies the liquidity layer, while its cross-border payments product, FinchRails, leverages that liquidity to move value across borders.

In practice, fiat converts to a stablecoin such as USDT or USDC for the transfer, then converts back to fiat upon arrival, settling the same day. Local-currency payout is executed through licensed partners in the destination market. FinchTrade covers cross-border rails across multiple corridors, including the euro area via SEPA integration, Nigeria and Ghana, the United Arab Emirates as a MENA hub, and Latin American corridors encompassing Mexico, Chile, and Argentina.

The Africa-Europe corridor illustrates the logic most directly. Consider a European business paying a Nigerian or Ghanaian supplier. Through correspondent banking, that payment carries the familiar 7 to 8 percent cost and a three-to-five-day wait. Routed through institutional stablecoin rails, the same payment settles the same day at a substantially lower cost, because the liquidity desk supplies the depth needed to make the conversion possible.

The infrastructure supporting this model is built to institutional standards. FinchTrade is licensed as a Swiss VASP and operates a non-custodial trade execution model with rigorous onboarding-stage AML and KYB procedures.

The Strategic Implication: Evaluate Infrastructure, Not Just Rails

The most significant shift lies in how institutions frame the decision. For years, the question a treasury or payments team posed was narrow: which bank or which rail should carry this payment. As correspondent banking retreats and regulated alternatives mature, that question is widening and becoming more consequential: which liquidity infrastructure provider can support settlement across the corridors in which we actually operate?

A rail can be evaluated on speed and cost alone. Infrastructure must be evaluated on the depth of liquidity behind it, the regulatory standing of the entity providing it, the security of its custody model, and the breadth of corridors it can genuinely serve.

Cross-border payments are unlikely to resolve themselves through the incumbent network. What is changing is that the combination of institutional liquidity and regulated stablecoin settlement now offers a coherent alternative—particularly along the Africa-Europe corridors, where the traditional model has retreated furthest and imposed the highest costs. For payment service providers and treasury teams, the practical task is no longer to accept those costs as fixed, but to evaluate the infrastructure that has begun to render them optional.