Stablecoins Speed International Transfers and Cut Fees

Canadians send billions of dollars overseas each year, and a significant portion of that amount is lost to fees. Despite more providers and improved competition driving fees down in some corridors, the World Bank estimates an average cost of about 6% — roughly $12 to send a typical $200 remittance from Canada. At the same time, the volume of remittances from Canada has climbed dramatically, topping $18 billion last year compared with a little over $7 billion a decade ago. That increase means more money is exposed to transfer costs and exchange-rate markups.

Stablecoins promise fast, low-cost international transfers

Proponents of stablecoins say the technology could make a meaningful difference for cross-border payments. “You can quickly send money anywhere in the world for less than a penny,” said Didier Lavallee, chief executive of digital asset firm Tetra Trust Co., describing the appeal of stablecoins for remittances.

Stablecoins differ from many volatile cryptocurrencies because issuers typically back them with assets — often short-term government securities such as U.S. Treasuries — to keep their value stable. That backing can make stablecoins a more reliable vehicle for holding and moving value internationally compared with speculative tokens whose prices swing widely.

Lavallee, who is working on a Canadian dollar–pegged stablecoin, says these tokens are not meant to replace everyday cash purchases like a cup of coffee. Instead, they are aimed at use cases such as remittances: he points out that about one in five Canadians send money abroad, and that group could benefit if transfers become faster and cheaper.

Potential savings come with steep learning curves and fraud risk

While stablecoins can reduce transfer times and, in some cases, lower direct fees, they are not without trade-offs. One major obstacle is user familiarity: many people do not know how to buy, send, receive or convert digital tokens safely. “A lot of people — most people, I would even say — just have no clue how to use coins or crypto in general,” said Enoch Omololu, a money expert at Savvy New Canadians. He notes that both senders and recipients need a level of technical comfort to handle wallets, private keys and blockchain addresses.

Beyond the learning curve, stablecoins introduce specific risks: scams, phishing emails, incorrect wallet addresses and the potential to lose funds permanently if they are sent to the wrong account. For that reason Omololu excluded stablecoins from a recent analysis of remittance options, citing their complexity and the higher chance of fraud. “It just opens a new world of risk,” he said.

Big names back efforts to simplify digital payments

Infrastructure and user experiences around stablecoins continue to improve, and some established financial and tech firms are investing in those developments. Tetra, for example, has attracted backing from companies including Wealthsimple, ATB Financial, National Bank and Shopify. Those partners are exploring ways to make tokenized transfers easier for ordinary customers.

“You can open a Wealthsimple account, and you’re basically a few clicks away from buying a U.S. stablecoin, and then sending that stablecoin,” Lavallee said. For most recipients, the only requirement is a digital wallet that accepts the token — a capability that many platforms now support in a relatively straightforward way.

That said, moving funds on and off crypto rails still carries costs. Crypto-trading platforms and exchanges charge fees to buy and sell stablecoins, and those fees can vary significantly, much like conventional currency exchange providers. Dedicated Canadian services that facilitate stablecoin purchases, such as Paytrie, accept e-transfers and advertise a 0.6% fee on buying and selling, plus network fees that depend on the blockchain used.

Omololu has used stablecoins for transfers and says they can work well, but they can become cumbersome when recipients need to convert the tokens into local cash or spend them like everyday currency. That conversion step can add time, extra fees and complexity.

Traditional remittance services remain competitive

Stablecoins add another option for sending money internationally, but they are not automatically the cheapest solution for every route or user. Established money-transfer services continue to offer competitive pricing and user-friendly experiences.

Wise, a large remittance provider, reports a global average price per transaction of around 0.54% and says its platforms already compete strongly on cost. “The reality right now is that the cost of moving money using stablecoins is actually still higher than just using Wise on most routes,” said Ankita D’Mello, principal product manager at Wise.

To choose the best option, Omololu recommends narrowing choices with three practical questions: which services operate in the destination country (service availability varies by corridor), how long the transfer will take (from near-instant to several days), and what the total cost will be, including any visible fees and hidden costs in exchange rates.

More competition and new technologies mean consumers have more ways to send money and more reason to compare providers. That increased awareness has helped people avoid unnecessarily high costs that were once harder to spot. “More people are actually aware that they are losing money by going through the traditional routes,” Omololu said. Many are now looking for apps and services that are faster, cheaper and safer for sending money abroad.

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