BaaS Using Stablecoin

Stablecoin for Cross-Border Payments

Stablecoin regulation is something OJK is actively paying attention to, if I'm not mistaken, it's already at the sandbox phase. Hypothetically, let's say regulation is already in place. I want to explore how we can utilize stablecoins in the banking industry, especially for international payments.

The Problem with International Payments Today

Right now, if a user wants to make an international payment, especially to a country with limited direct banking relationships. The flow looks like this:

IDR → Bank 1 → ... → Bank X → Local Currency → Merchant

For each step, the bank charges a fee, and settlements only happen during working hours. This means the merchant usually receives the money on T+1 or T+2. This creates three problems:

1. Buyer: The buyer ends up paying a rather expensive cumulative fee since each bank charges for moving the money along.
2. Merchant: There's a payment lead time that creates downstream cash flow problems I won't get into here.
3. Black Box: It's surprisingly hard to track where the money is at any given moment, a bank could be on holiday, or their system might be down, which makes things particularly stressful when the someone needs to track the money.

Stablecoin as the Solution

These problems can be solved by using stablecoins as the rail for cross-border payments. Stablecoins have several key advantages over the slow SWIFT process:

• 24/7/365 — no cut-off times, no bank holidays
• Fast — settlement in minutes, not days
• Auditable — every transaction is traceable on-chain
• One flat fee — easy to calculate upfront, no surprise deductions per hop

The flow would look something like this:

IDR → Local Stablecoin → Local Currency → Merchant

The merchant never needs to touch any crypto or stablecoin, it's purely a backend rail for more efficient processing.

The Hurdles

Of course, there are some challenges to implementing this:

1. Regulation : Does existing regulation allow cross-border payments using stablecoins? And what about the regulatory requirements on the destination country's side?
2. Licensing : This would require some combination of banking/fintech and crypto licenses, or alternatively, a strategic partnership with already licensed entities.
3. Incumbent resistance : Traditional banks are unlikely to embrace this, since correspondent banking fees are a significant revenue stream for them.

This business model is already being used by a company in Brazil called Avenia. They position themselves as a stablecoin rail that fintech companies serving cross-border payments can integrate directly, so the model is already validated in practice.