Visa and Lloyds Trial Stablecoin Settlement for Cross-Border Payments

Visa and Lloyds Banking Group have completed a live pilot exploring whether stablecoins could be used to settle cross-border transactions. The trial tested whether stablecoin-based settlement could make international payments faster and more transparent compared with existing methods. It is important to note this was an experimental pilot, not the launch of a new consumer product, so there is nothing for ordinary customers to sign up for yet.

Stablecoins are cryptocurrencies designed to hold a steady value, usually pegged to a currency like the US dollar, by being backed with reserves. Because they can move on blockchain networks around the clock, proponents argue they could help settle payments between banks more quickly than traditional correspondent banking, which often relies on multiple intermediaries and business-hours processing windows. A major payments network and a large retail bank running a live trial together signals that mainstream financial institutions are seriously evaluating this infrastructure, even if adoption at scale remains years away.

For now, this kind of pilot is mostly a signal about the direction of travel in cross-border payments rather than something that changes what is available to consumers or businesses today. Settlement speed between banks is only one part of what determines the cost and speed of an international money transfer. The fees and exchange rate margins charged by the provider handling your transfer still matter far more in practice than the underlying settlement rail.

That said, trials like this are worth watching because they hint at where the industry may be headed. If stablecoin settlement is eventually adopted more broadly by banks and payment networks, it could in theory reduce the operational costs involved in moving money across borders, and some of those savings could eventually be passed on to customers through lower fees or better exchange rates. It is far too early to know whether that will happen, or on what timeline, and plenty of similar pilots in the payments industry never progress beyond the testing stage.

For someone sending money internationally today, the practical advice has not changed. The best way to find a good deal is still to compare the total cost of a transfer, including both the fee charged and the margin added to the exchange rate, across providers before sending money. Innovations in settlement infrastructure may eventually influence pricing, but until they are reflected in the rates and fees providers actually offer, it remains more useful to compare current transfer costs directly. Readers interested in how transfer fees and margins compare across providers can see a breakdown on FairAscent's international transfers page.

This article was drafted with AI assistance as part of our editorial process.

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