Crypto Infrastructure Powers Fiat Payments
Lightspark and Cross River Bank have partnered to enable 24/7 real-time fiat payments using Bitcoin's infrastructure for settlement. Separately, global payments platform Payoneer is rolling out stablecoin capabilities for international payments in response to client demand for faster, cheaper cross-border options. Both moves signal a trend of embedding crypto rails into traditional financial services for instant, global money movement.
- The Lightspark and Cross River collaboration utilizes an open-source standard called Universal Money Address (UMA), which aims to make sending any currency as simple as sending an email by using the Bitcoin Lightning Network for settlement. This approach is currency-agnostic, meaning a sender can transmit funds in USD, and the recipient can instantly receive them in their local currency without directly handling Bitcoin. - Payoneer's stablecoin services are powered by Bridge, a stablecoin infrastructure platform owned by Stripe. This partnership allows Payoneer to embed the functionality directly into its platform, abstracting the complexities of blockchain so businesses can send, hold, and receive stablecoins without managing crypto wallets or nodes themselves. - The global cross-border payments market is substantial, with projections to grow from over $200 billion in revenue in 2024 to more than $320 billion by 2030, driven by the increasing demand for faster and cheaper payment systems. However, the average cost for remittances remains high at 6.35%, more than double the UN's Sustainable Development Goal of 3%. - Institutional adoption of stablecoins for cross-border payments is growing, with one survey indicating that while 13% of financial institutions currently use them, 54% of non-users plan to adopt them within the next year. Projections suggest that stablecoins could account for 5-10% of all cross-border payments by 2030. - In the U.S. domestic real-time payments landscape, The Clearing House's RTP network processed $246 billion across 343 million transactions in 2024. The newer FedNow network, which launched in July 2023, saw its payment value surge to over $20 billion in Q4 2024, with over 1,200 participating institutions. - Cross River Bank, Lightspark's partner, operates on a Banking-as-a-Service (BaaS) model, providing the regulated infrastructure for fintechs like Coinbase and Stripe. The bank has built a proprietary, API-driven core banking system called COS to enable customized and scalable solutions for its partners. - The move by Payoneer reflects a broader industry trend where fintechs are embedding crypto and stablecoin solutions to address specific client pain points in the B2B sector, which dominates cross-border transaction volumes. These solutions aim to bypass the complexities and costs of traditional correspondent banking.
