$100 becomes 94: Revealing the profit flow of stablecoin remittance profits

According to Woofun AI, blockchain, as a balancer in the 21st century, did not create a global industry giant; instead, profits from cross-border remittance were redistributed to regional leaders who are deeply involved in the local community. Technology lowers the bar, but real value capture happens off-chain. All great technologies are powerful balancers, and they establish a common set of benchmarks for all the value that the upper echelons can create. Mobile phones and the internet are great examples of the 20th century, and blockchain is expected to be the same technology in the 21st century.

However, in the ancient and painful field of remittance, on-chain settlement is only the foundation. No global giant can take it all, and profits eventually sink to regional leaders. This article will disassemble this industrial structure and explain how on-chain and off-chain platforms can collaborate to seize value in this iterative remittance system; this new system can reduce remittance fees and speed up cross-border capital flows, but the logic of value attribution has fundamentally reversed.

The transfer of funds itself will generate costs, and the cost of cross-border transfers will rise even higher. The problem is that users often silently bear this cost without knowing why they are actually paying. Assuming you work in the US and remit $100 home, your family received in Mexico in pesos converted to only about $94. The median loss of $6 appears to be a processing fee for a cross-border transfer. The actual processing fee shown on the screen is only about $2, which is less than half of $6. So where did the remaining $4 go? An ordinary remittance transaction has to go through multiple transfers. Each level is controlled by a specific agency, and all parties are drawn from it. The largest share of these is usually the foreign exchange process: the US dollar needs to be converted into pesos to enter the Mexican account, and the bank charges the price difference on top of the middle exchange rate in the market. This part of the cost is about 3 US dollars, accounting for half of the total expenditure.

This hidden cost black hole reveals that in traditional remittance systems, explicit fees are not the full cost that users bear; foreign exchange spreads are black holes that eat up profits.

Stablecoins were introduced and gradually became popular, and we thought they would completely change the cross-border remittance model. But where will reality go? Blockchain is only a threshold of entry; it is not a competitive moat; it cannot create a single industry giant. The real value lies in off-chain business: obtaining licenses, building bank partnerships, and achieving terminal payments. Each country and region has vastly different regulatory rules and banking system requirements. A large number of leading regional companies will emerge in the remittance market. Each company will deeply cultivate its own remittance channel and establish advantages that are difficult for others to reach;

This advantage can come from license resources, strong distribution channels, or cross-selling capabilities. The diagram above shows just one transfer path: sending $100 from the US to Mexico. If you switch to a remittance channel such as Europe-Asia, or differentiate between different types of person-to-person and business-to-business remittance, the cost structure will change according to the challenges they face. Every remittance channel and every type of remittance scenario has unique bottlenecks. As bottlenecks change, market opportunities and value ownership will also change. The global rate map shows a stark contrast between mature markets and high-cost regions. The US-Mexico remittance channel is a relatively mature example; it is the largest bilateral remittance line in the world. The payment infrastructure at both ends is perfect, and market competition has already reduced the processing fee to 4.53% for remittance of US dollars to Mexico. Mexico is also the market with the lowest collection cost in the G20.

At the same time, the Mexican peso has sufficient liquidity, and SPEI, the country's real-time payment system, can process transactions instantly around the clock. If all remittance channels reached this level, blockchain would have little room for use. According to World Bank data, the average global remittance rate is 6.36%, which is more than double the target set by the United Nations. The situation is particularly severe in sub-Saharan Africa, where the average rate is 8.46%. Africa also has 13 remittance channels with processing fees of more than 20%, making it the region with the highest collection costs in the world. In contrast, the Middle East, North Africa, Afghanistan, and Pakistan regions have the lowest collection rates in the world, averaging 5.11%. The cost comes from friction. In recipient countries with well-developed banking systems and reliable local payment channels like Mexico, most of the problems have been solved, and blockchain can play a limited role.

But in regions where banking services are lacking, costs are high, or people don't trust banks, blockchain is the natural choice. There are around 20 remittance channels around the world that have no low-cost services at all, and the vast majority of them are intra-African transfers. The biggest bottleneck in any remittance channel is the foreign exchange spread. The level of the spread depends on how close trade between the two currencies belong to the economies. With frequent trade exchanges, the two countries will hold each other's currencies to ensure currency liquidity. Trade activity between the US and Mexico is very strong, the dollar has sufficient liquidity against the peso, and banks have little room to raise prices. However, when trade between the two countries is scarce, the two sides have no incentive to hold rival currencies, and liquidity in the foreign exchange market will be seriously insufficient. This relationship between trade and the foreign exchange market has created a paradox: it is precisely where remittance demand is most urgent, and transfer costs are the highest.

Geography is only one of the influencing factors; the type of transfer business is also very important. The $100 example above is a person-to-person (C2C) transfer. In 2025, person-to-person remittances accounted for less than 5% of retail remittance transactions, yet contributed 14% of industry revenue. The average processing fee rate was 3.1%, the highest of all business types. Business-to-business (B2B) remittance is the opposite. The transaction volume is the largest, but the processing fee rate is extremely low. The root causes of the obstacles to large-scale development of the two types of businesses are different. Individual to individual transfers are small and mostly one-time transactions. Identity verification, compliance checks, terminal withdrawals, and marketing will all increase customer acquisition costs. Therefore, the core of individual remittance competition is not foreign exchange, but channel distribution. Underlying payment channels have become homogenized. The key is to obtain and retain remittance users at low cost to seize value. On the other hand, when looking at business-to-business transactions, single transactions are large, transaction frequency is high, processing fees are meager, and the upper limit of the business scale is limited by working capital. If the payee in Manila wants to receive the account on the same day, the service provider must deposit pesos in advance into the Manila account, also known as deposit funds.

If service providers want to serve multiple countries, deposit funds in various regions will expand rapidly, making it difficult for individual companies to bear. It can be seen from this that different transfer scenarios require different solutions: individual remittances require lower customer acquisition and distribution costs, while corporate remittances need to reduce capital consumption in order to achieve timely delivery and reduce deposit funds in various remittance channels. Many blockchain projects are reconstructing the industrial structure around these two types of scenarios. Now that the infrastructure is gradually being perfected, blockchain is the easiest part to build. Blockchain can reduce settlement and foreign exchange costs, but everyone can use blockchain, and this cost reduction cannot bring a unique competitive advantage. All participants using blockchain stand on the same line, and all contendable value flows down the chain. Local companies with exclusive licenses, bank cooperation resources, and mature deposit and withdrawal networks have the opportunity to seize the greatest share of value. The core functions of each level in the next-generation remittance structure have not fundamentally changed; only new assets have been used to complete settlement, and the value distribution pattern has been reshuffled.

Every remittance starts at the customer interaction layer. Apps with huge traffic can solve the pain points of individual to individual remittance by setting up a transfer portal. Felix Pago used WhatsApp to start a remittance business, so immigrants didn't need to download a new app. When you send $200 through Felix Pago, you can exchange it for 3680 Mexican pesos, while Wise only gives 3604 pesos. Felix Pago uses stablecoins to complete settlement on the chain, but what users see is only communication software they have been using for many years. The distribution channel is its moat, and it is on this that Felix Pago completed Series B financing of 75 million US dollars, and the annualized transaction scale reached several billion dollars. The interaction layer and distribution channels have become new moats for traffic entry. Customer acquisition costs are a major obstacle to person-to-person remittance, and using existing super apps such as WhatsApp as an entry point can greatly reduce this cost. Felix Pago's case shows that whoever has an interactive interface that users trust can intercept higher premiums in a seemingly transparent market.

The deposit and withdrawal layer is the hardest part of the entire system. The cost of stablecoin transfers is almost negligible, but the interconversion of cash and stablecoins is exactly where most crypto payment solutions struggle. Every country has an independent banking system, regulatory license requirements, and cash usage habits, and deposit and withdrawal facilities must be built market-by-market; only enterprises that are deeply involved in a single region can flatten investment costs and achieve a closed business loop. This also determines that the winner of this track is a regional professional service provider rather than a global set of universal deposit and withdrawal solutions. Yellow Card has obtained currency transmission licenses and virtual asset service provider licenses in more than 20 African countries, opening up banking and mobile money networks, and enabling two-way exchange of fiat and stablecoins such as naira, cedi, and rand.

Collecting a full set of licenses takes time and is expensive, so Yellow Card chose to export this infrastructure to the outside world and rely on deposit and withdrawal service fees and corporate business transaction volume to profit, rather than charging ordinary consumers. Kotani Pay connects stablecoins to mobile currencies through the USSD function, and can complete fund payments without an internet function. Few companies are willing to do this kind of difficult but necessary connection. Coins.ph is a licensed deposit and withdrawal service provider in the Philippines. It connects to the domestic real-time payment system and cash agency network, and relies on license resources and payment accessibility to obtain benefits. Looking at the overall picture, the deposit and withdrawal process is fraught with a number of localization challenges.

This is why regional players can reap value from this. Yellow Card and Coins.ph are each deeply involved in their remittance channels and don't grab each other's market share. ZyntaFinance addresses similar pain points for enterprises. Most African currencies do not have direct trading pairs. To transfer money from Accra to Lagos, the funds have to go through an agent bank in New York or London to first convert cedi to US dollars and then to naira. ZyntaFinance uses stablecoins to complete settlement, with a single transaction fee of 0.5%-1%, and also selects the best one from multiple Solana, Ethereum, and Stellar public chains based on real-time costs.

According to data compiled by Woofun AI, these regional leaders not only solved compliance issues by building localized deposit and withdrawal networks, but also reduced unit transaction costs through scale effects, thus occupying an irreplaceable position in the industrial chain.

The orchestration layer mainly serves business-to-business operations. The orchestration layer service provider uniformly controls payment channels, stablecoin types, and remittance lines, and encapsulates deposit, withdrawal and settlement capabilities into a set of API interfaces. There was no such layer in the old industrial structure, and existing industry giants laid out the circuit through acquisitions one after another. Stripe spent about $1.1 billion to acquire Bridge. Developers can directly call the interface to complete cross-border transfers without having to worry about wallet, public chain, or license details; Stripe relied on its massive number of merchants to extract service fees from every transfer, and the scale of the business expanded rapidly.

Mastercard (MA.US) spent US$1.8 billion to acquire BVNK to enable multi-channel fiat and stablecoin settlement for large enterprises, while supporting local compliance licenses. The orchestration layer is one of the few levels where a global leader is likely to be born. Businesses like Stripe and Mastercard can open up all remittance channels through a set of APIs. But even so, global orchestration service providers cannot control naira withdrawal channels, Philippine payment licenses, or local bank accounts in Manila; they must connect to various regional leaders. Instead, global giants will become customers of local service providers. The value will flow downward to leading regional companies on various routes, and not all will be gathered at the top level.

The settlement asset layer replaces the traditional cross-border messaging system. Stablecoins replace SWIFT messages and pre-stored Nostro accounts to enable round-the-clock settlement. The value of this layer comes from reserve assets. Circle (CRCL.US) holds billions of dollars of US Treasury bonds as USDC reserves and earns interest on reserves, and ordinary coin holders cannot obtain this portion of the proceeds. In 2025, Tether relied on this model to make more than $10 billion in profits, and its dominant position is in the emerging market where remittance problems are most prominent. This is why traditional giants such as Western Union (WU.US), Visa (V.US), and PayPal (PYPL.US) are scrambling to issue their own stablecoins rather than simply using third-party stablecoins. The foreign exchange layer was once the most profitable sector under the old structure. Under the new system, banks' price increases of 50-150 basis points were reduced to single-digit costs. OpenFX quotes only 3-12 basis points. Using stablecoins as the settlement channel for foreign exchange transactions, it hedges foreign exchange exposure through reverse orders as much as possible, and assumes positions on its own when hedging is not possible, so as to determine the exchange rate in real time.

If market liquidity is poor, currency fluctuations are severe, and the risk of holding a position directly is high, OpenFX will transfer the risk to a local bank or OTC counter in exchange for lower profits. Internal order matching can reduce capital usage, and the contribution of handling fee revenue to profits can be further amplified. dLocal (DLO.US) uses this model in Africa, Latin America, and Asia. The processing fee rate remains around 0.7%, and it survives on total transactions rather than high profits. Stablecoins restructure the seven-tier remittance industry chain, reducing the cost of $100 cross-border remittance from $5.99 to $1.10, and stablecoins replace SWIFT in the settlement process.

Liquidate margins to optimize capital efficiency. The margin will offset transactions that flow in both directions, and only the net amount remaining after mutual offsetting will be transferred. The clearing layer is responsible for handling margins on multi-party transactions and completing net settlement. As mentioned earlier, service providers need to reserve funds in various countries. Companies such as OpenFX and dLocal rely on clearing gaps to reduce the amount of idle capital scattered across countries. Institutions such as Ubyx, T-0 Network, and Cycles achieve two-way transaction hedging, and neither party to the transaction needs to deposit funds. Some people remit dollars to Manila, and others send back pesos at the same time. The two transactions cancel each other out, and there is no need to actually transfer funds. The clearing agency consolidated a bunch of bilateral debts into one net sum to complete settlement, and relied on margin services to collect fees. Although the current business volume is still small, this model can release tens of billions of dollars of occupied capital. T-0 Network was launched in early 2026 and already supports cross-border payments for 1200 foreign exchange pairs. From January to August 2026, business-to-business stablecoin settlements reached US$150 billion, up 40% year over year.

Comparing the old and new industrial structures, we can clearly see what has changed and what remains the same. In the past, most of the profits were taken away by the foreign exchange process; today, profits are being redistributed to three major sectors: the interaction layer with scarce traffic, the orchestration layer that giants are scrambling to acquire, and settlement asset issuers that earn interest on reserves. Value flows to entities that control scarce resources within every remittance channel: either an interactive portal trusted by users, or compliance with license conditions, or huge reserves that can passively generate revenue. It is difficult to obtain high value from the on-chain link. Stablecoins can only speed up the flow of US dollars across countries, but in the end, people always have to hold pesos in Manila to complete the exchange of US dollars.

The case of cross-border remittance is of general reference significance. Blockchain reduces transfer costs, yet it won't let any company build a moat with this efficiency. In the Web 2.5 era, agreements complete the underlying work, and applications control users; cross-border remittance superimposes geographical attributes on top of this: infrastructure is becoming globalized, yet barriers to differentiated competition are firmly rooted. Remitters in the US still send $100, and families in Mexico receive a few more dollars on the same day. Most of the profits generated in the middle fell into the pockets of businesses in cities that neither party had heard of or visited.