Stablecoins are increasingly being considered for a use case that extends beyond crypto trading: moving value across borders.
The attraction is understandable. Stablecoins can potentially enable faster settlement, reduce some of the friction associated with traditional cross-border payments and allow value to move using blockchain infrastructure.
But the story is more nuanced than suggesting that stablecoins are replacing traditional payment systems. The IMF notes that while stablecoin adoption and payment-related activity are growing, stablecoin flows remain relatively small compared with the overall global cross-border payments market.
What is changing is the role stablecoins may play within the broader payments ecosystem.
For businesses operating internationally, that creates an important legal question: what happens when a digital asset begins functioning as a payment and settlement tool?
From crypto asset to payment tool
Stablecoins are digital assets designed to maintain a stable value against an external reference, most commonly a fiat currency such as the US dollar.
Historically, their primary use has been closely associated with crypto markets. Increasingly, however, regulators and financial institutions are examining their potential role in payments, remittances and cross-border settlement.
The potential benefits are significant. Blockchain-based settlement may allow value to move more quickly and with fewer intermediaries than some traditional payment arrangements. For businesses operating across jurisdictions, this could create opportunities around international settlement, treasury management and digital commerce.
However, the technology does not exist outside the existing legal and financial system.
The legal question is bigger than the technology
For a business considering stablecoins for an international transaction, the first question should not simply be:
“Can we pay in stablecoins?”
It should be: “What is the legal and economic nature of the transaction?”
Depending on the structure and jurisdictions involved, a stablecoin transaction may raise considerations relating to:
- Payment services regulation
- Foreign exchange and capital-flow controls
- AML/CFT and KYC requirements
- Sanctions compliance
- Tax
- Custody and safeguarding
- Licensing
- Consumer or client protection
- Record keeping and reporting
- The legal status of the stablecoin and its issuer
A transaction does not cease to have legal consequences because it takes place on a blockchain.
In fact, introducing blockchain infrastructure can make it even more important to understand exactly who is involved, where the transaction takes place and which regulatory frameworks apply.
The cross-border regulatory challenge
One of the biggest challenges is that the technology is global, while regulation remains largely jurisdictional.
A stablecoin may be issued in one country, held by a customer in another, transferred through a service provider operating from a third jurisdiction and ultimately used to settle an obligation somewhere else.
This creates challenges for both businesses and regulators.
The IMF has highlighted the importance of international cooperation in addressing stablecoin activity because transactions can move across jurisdictions while supervisory powers remain primarily national.
Regulatory developments are already reflecting this concern.
In 2026, the European Banking Authority and the New York State Department of Financial Services established a framework for cooperation and information exchange concerning cross-border stablecoin activities.
In the United States, a dedicated federal framework for payment stablecoins is also being implemented under the GENIUS Act.
These developments point to a broader shift: stablecoins are increasingly being considered as part of the financial and payments infrastructure rather than solely as a crypto-market product.
Why this matters for emerging markets
The issue is particularly relevant in emerging markets, where cross-border payments can be more costly or difficult to access.
The IMF has highlighted Nigeria as an example of a market where stablecoins are increasingly being used for cross-border transactions, remittances and access to foreign currency.
That creates both opportunities and risks.
Stablecoins can potentially reduce payment friction and improve access to international value transfer. At the same time, widespread use of foreign-currency stablecoins can raise questions around currency substitution, capital flows and monetary policy.
This means that regulatory approaches cannot simply be copied from one jurisdiction to another.
For African businesses operating internationally, understanding the regulatory environment in each relevant jurisdiction will therefore become increasingly important.
What should businesses consider?
Businesses considering stablecoins as part of their cross-border operations should start with the underlying business model rather than the technology.
1. Understand the transaction
What is the stablecoin actually being used for? Is it a payment for goods or services, a settlement mechanism, a treasury tool, an investment or something else? The answer can affect the regulatory analysis.
2. Map the jurisdictions
Identify where the customer, business, service provider, wallet, exchange and stablecoin issuer are located. A structure that is permissible in one jurisdiction may not receive the same treatment elsewhere.
3. Understand the intermediaries
Businesses should know who is facilitating the transaction and what regulatory status applies to those entities. This can include exchanges, custodians, payment providers and other digital-asset service providers.
4. Consider compliance from the outset
AML/KYC, sanctions screening, transaction monitoring, record keeping and reporting should form part of the structure from the beginning rather than being added once the technology has already been implemented.
Stablecoins are part of a broader shift
Stablecoins are not developing in isolation.
The wider financial system is also exploring tokenised deposits, tokenised financial assets and other forms of digital financial infrastructure.
The Bank for International Settlements' Project Agorá, for example, is examining how tokenised central bank reserves and commercial bank deposits could support improved wholesale cross-border settlement.
This suggests that the future of cross-border payments may not be a simple choice between traditional finance and crypto.
Instead, different forms of tokenised money and digital infrastructure may increasingly operate alongside existing regulated systems.
Stablecoins may form part of that evolution, but they will not necessarily be the only solution.
In Closing
Stablecoins have not replaced traditional cross-border payment systems, and current evidence does not support treating them as a wholesale replacement.
They have, however, moved beyond being solely a crypto-market settlement tool.
Their growing use in cross-border transactions, combined with increasing regulatory attention, means that businesses considering stablecoin-based payments need to look beyond the technology itself.
The key question is not simply whether stablecoins can move value faster.
It is whether the proposed structure is commercially workable, legally sound and compliant across every jurisdiction involved.
As stablecoins, tokenisation and digital payments continue to converge, understanding that legal architecture will become increasingly important for businesses operating across borders.