How Crossborder Stablecoin Payments Have Quietly Become a Multi-Billion Dollar Market
Bhanu Kohli is the co-founder and CEO of Layer2 Financial, a B2B payments company leveraging stablecoins for faster, cheaper payment processing.
Mike Giampapa is General Partner of Galaxy Ventures, focusing on the intersection of crypto and financial services, security & DeFi applications, and developer tooling.
In this conversation, Bhanu, Mike and Will Beeson discuss real economy applications of stablecoins, including payments. We compare Layer2’s performance, economics and business model with traditional payments companies and look at potential applications for stablecoins in financial markets more broadly.
This conversation was a fantastic look at a rapidly scaling, real-world use case for crypto and the disruptive potential of blockchain as financial infrastructure.
Will:
It’s great to connect with both of you. We've had a few conversations offline, and I'm really interested in the work you're doing — Bhanu, the company you're building at Layer2, and Mike, your broader perspective on crypto.
For today’s conversation, I’d love to focus in on stablecoins.
Bhanu, if you were building a payments company 10 years ago — or even building something like Layer2 — you would have been doing it with fiat. You’d be using different infrastructure, working with different partners, and operating on completely different rails.
But now, it’s a different story. What’s changed about what you're building in 2024?
Bhanu:
Yeah, great question.
At Layer2, we’re building a global, regulated payments infrastructure designed to accelerate cross-border money movement by leveraging both digital assets and fiat. What that means in practice is that we use digital assets to move value quickly across jurisdictions, and then we use local, high-speed payment rails for last-mile delivery.
By breaking the problem into these two parts, we avoid needing to hold large treasury positions, and we’re not dependent on just one or two banking partners — or on SWIFT. Instead, we can work with the best digital asset liquidity providers to on- and off-ramp into local currencies. Then we can partner with the best local banks for collection and payout.
This model just wouldn’t have been possible even five years ago.
Back then, you would’ve had to rely on holding funds with banks in every region, or moving money via SWIFT. Both approaches come with real limitations. Holding treasury balances limits how much money you can move, and you're dependent on whichever banks you’re holding funds with. Only then would they give you access to their FX desks and local payment rails. And setting up those banking relationships is a slow, complex process. Because they know that, the banks can also offer less favorable rates — which means you can’t pass better pricing on to your customers.
Digital assets have changed the game.
They’ve taken control away from banks when it comes to cross-border payments. It’s created an open ecosystem, which gives us options. We can work with top-tier liquidity providers — Galaxy, B2C2, Enigma, and others — to on- and off-ramp in local markets. Then we can connect with whichever banks offer the best APIs, access to payment rails, and the fastest delivery.
Again, this just wasn’t feasible five years ago. But now, with the rise of digital assets — and especially stablecoins — it’s become a game-changer.
Will:
Wow, alright. Let me ask you a few basic questions, just to make sure we're super clear on the business.
So we're talking about cross-border payments — and specifically, this is for business users, not retail remittances. These are companies that need to send and receive payments across borders. Is that right?
Bhanu:
That’s correct. Most of our customers — and the majority of the volume moving through the platform — comes from businesses. We do have some remittance clients, and there are a few users making personal payments, but the real value of our platform is for businesses moving large sums of money. That’s where it really shines.
Will:
And specifically across borders?
Bhanu:
Correct — cross-border payments.
Take the U.S. as an example. Domestically, the U.S. has strong infrastructure. You have Fedwire, and now FedNow is launching as well. It’s already possible to move large amounts of money within the U.S. quickly — within 15 minutes or less. With FedNow, it will get even faster.
So the problem we’re solving isn’t how to move money between two banks within the U.S. The challenge we’re focused on is moving money across jurisdictions — from the U.S. to Europe, for example.
Will:
Perfect. Alright, I think there’s a lot more we can unpack as we go, because for someone who’s not deep in payments, what you just described — sending money internationally — sounds pretty straightforward. But under the hood, there are a lot of layers and complexities involved.
Before we get into all of that, though, I’d love to zoom out for a minute.
Mike, I know you and the team at Galaxy have spent a lot of time thinking about the stablecoin payments space — where adoption is happening, what use cases are real, where volumes are growing, and where the actual revenue pools are today.
At a high level, how do you see the stablecoin payments opportunity right now?
Mike:
I think this is one of the most exciting trends — not just in crypto, but in all of financial services.
If you rewind a bit, the original vision for Bitcoin was as a peer-to-peer payment system. But for years after its launch, there wasn’t much to show in terms of meaningful crypto payments. That changed with the rise of stablecoins.
Once stablecoins started gaining adoption, the market structure began to evolve to support crypto payments. It wasn’t just better blockchain infrastructure — it was also the emergence of market makers, liquidity providers, and the broader infrastructure needed to support global, asset-backed payments. An entire industry has quietly formed around this, and that’s what has made it possible for crypto to be used for real-world payment use cases like the ones Bhanu described.
So while this isn’t a brand-new idea, it’s something the industry has been steadily building toward.
In the early days, stablecoins were mostly used as trading collateral — primarily for transactions on exchanges. But since then, other use cases have emerged. One that’s often discussed is in emerging markets and developing countries — places where individuals and businesses want access to U.S. dollars but don’t have easy or legal access through the banking system, often due to capital controls.
Stablecoins have unlocked a powerful alternative — a way for anyone with a smartphone to access digital U.S. dollars. That’s a huge leap forward in global financial inclusion and access. From a non-U.S., non-developed-market perspective, that’s transformative.
The third — and increasingly important — use case is stablecoins for payments, which is exactly what Bhanu is working on.
A few years ago at Galaxy, we stepped back and asked: if crypto and blockchains are going to disrupt payments, where would it happen first? We broke it down by payment types — consumer to consumer, consumer to business, business to consumer, and business to business — and then overlaid that with domestic versus cross-border.
What we found was that cross-border B2B payments are by far the most complex. They’re loaded with friction, intermediaries, high costs, and slow settlement times. And it turns out that blockchains are exceptionally good at moving money across borders quickly and at low cost.
That’s why we started looking for companies like Layer2. Our hypothesis was that if crypto was going to break into payments at scale, it would start here — and I think we’re now seeing that thesis play out in a meaningful way.
Will:
So Bhanu, to make this really tangible — who are your active customers today? Where are they based, and what kinds of businesses are they operating?
Bhanu:
That’s a great question.
We provide infrastructure, so our direct clients are fintechs, neobanks, payment processors — and increasingly, traditional banks are coming online as well. These partners are based all over the world.
The end customers we’re serving through these partners are primarily corporate clients, as we mentioned earlier.
What’s interesting is how that customer base has evolved. When we first launched, our early users were mostly Web3-native companies — businesses that held stablecoin assets and wanted to move money efficiently, often for things like payroll.
But over the past six or seven months, we’ve seen a huge expansion in both the types of companies and the sectors they represent.
Today, we’re working with technology companies, consulting firms, e-commerce platforms, marketplaces, agricultural businesses, manufacturing companies — it’s an incredibly diverse mix. One of my favorite examples is a grain company that was founded in 1970. It’s the oldest company on our platform, and they’re now using it to move money more efficiently across borders.
So while we started with Web3-native clients, most companies using the platform today are actually Web2 — and in some cases, even Web1 — businesses. They're now leveraging the combination of fiat and digital asset infrastructure to streamline payments at a global scale.
Will:
So some of these businesses — and it sounds like a growing segment — are what we’d call real economy, offline businesses. They need to make payments for supply chain reasons, or to settle invoices, that sort of thing.
Are these companies aware that they’re leveraging stablecoins or blockchain infrastructure? Or from their perspective, are they just using a better payments solution — one that happens to be cheaper and faster than anything else they’ve used?
Bhanu:
Sometimes they’re not even aware.
These businesses typically rely on payment processors or banks to move their money. Those institutions, in turn, use us behind the scenes to move that money more efficiently.
So in some cases, the end customer does know that crypto — specifically stablecoins — is powering some or all of the payment experience. But in many cases, they don’t. All they know is that the money is moving faster and more reliably than before.
For example, a payment processor can go to its existing customer base and say, “Hey, we can now move money for you on a T+0 basis.” If you're a business in Argentina and need to pay a supplier in China, we can make that happen faster than ever. Just send us local currency, and we’ll make sure the funds are delivered to your supplier in China — same day or next day.
That kind of speed — T+0 or T+1 — is a step-change from what was possible even two or three years ago.
Will:
Alright, I’m a little nervous to ask this — because I’m not sure I want to know the answer.
Is this amazing new technology, at this point, actually resulting in lower costs for end customers? Or are they effectively paying a premium for same-day delivery, while intermediaries capture a big piece of the margin?
Bhanu:
No — in most cases, it’s actually improved the cost structure. It’s brought costs down.
At the same time, it’s increased transparency, improved speed, and — maybe most importantly — made it significantly more convenient to move money. Those are the main reasons corporate customers like using our infrastructure.
If I had to rank them, I’d say the biggest factor is convenience, followed by transparency, then price and speed.
Now, to be fair, there are some clients who are offering a better experience and choosing to charge a premium for it. But for the most part, the cost to the end customer has gone down.
And there’s a natural tipping point. Customers won’t pay 200 or 300 basis points just to get money there a day or two faster. So there’s an ongoing price optimization happening in the market as well. Most players are aware of that, and it keeps pricing competitive.
Will:
Makes sense.
Mike, I know you’ve looked not just at the stablecoin landscape but also at a range of startups operating in this space — across different stages and use cases.
What specific areas have you gone deepest on, and where have you potentially made investments?
Mike:
This B2B cross-border use case is a major focus for us at Galaxy, though it takes slightly different shapes depending on the application.
Some companies are focused on specific regions — for example, helping businesses in Latin America that need to pay out contractors or vendors internationally. Others are operating in markets like Africa, where building reliable on- and off-ramps is especially challenging.
We think the real moats in this space are around banking partnerships, regulatory licensing, and what we call last-mile delivery — that ability to go from fiat into crypto, and then back into local fiat at the other end of the transaction. That’s where a lot of the value is created and captured. And it’s where we see companies like Layer2 really differentiating themselves.
I think we’re going to see the market evolve in a way where you have regional specialists — companies that are experts in specific geographies and focused on particular use cases. That could mean remittances, B2B payments, or even corporate treasury management.
For example, if you’re a multinational with legal entities around the world and you need to move money between them, there could be dedicated products designed for CFOs and treasury teams to do just that.
So at the application layer, we expect to see a proliferation of specialized platforms — different use cases, different geographies.
And then we’ll also see companies like Layer2 emerge as long-haul providers — to use a logistics analogy — moving money from major markets like the U.S. to Europe, to India, or to other large, liquid corridors.
Another emerging use case we’re tracking is spending with stablecoins.
As people get more comfortable holding and storing value in stablecoins — and making payments with them — the next natural step is spending. So we’re seeing an ecosystem emerge that allows individuals and businesses to spend their crypto through integrations with card networks like Visa and Mastercard.
That’s a relatively new development, but one that’s growing quickly on top of the core cross-border infrastructure companies like Layer2 are enabling.
Will:
Bhanu, it sounds like your business — and I think you mentioned this earlier using the term “last mile” — has, at a high level, two core components.
There’s the cross-border element, which is ideally facilitated using stablecoins. And then there’s what you might call the on- and off-ramp, or fiat leg — the last-mile component.
So let’s say I’m a company in Argentina and I need to make a payment to a supplier in Turkey. I want to send local currency, and presumably the recipient wants to receive local currency as well. Now, in some cases, maybe both sides are happy to transact in dollars. But in many cases, it's fiat to fiat.
That means you need to convert from local fiat to stablecoin at the point of origin, use stablecoin for the cross-border transfer, and then convert back from stablecoin into local fiat on the receiving end.
And I imagine that’s the hard part of the business.
Sending stablecoins from one wallet to another is pretty straightforward. But converting from fiat to stablecoin and back again — that’s where the complexity lies. And honestly, that’s where crypto entrepreneurs often underestimate the challenge. One thing people in crypto are sometimes guilty of is identifying a financial problem that’s already been solved — like cross-border payments — and assuming it’s a brand-new, unsolved problem, then trying to reinvent the wheel and making a lot of avoidable mistakes along the way.
Correspondent banking has existed for decades. Fintechs have been working on this problem for a long time, too.
So with all of that said, I’d love to dig into the distinction between the stablecoin leg and the fiat leg — and then maybe we can get into the legacy of previous solutions and how your approach builds on or diverges from that history.
Bhanu:
Let’s take your Argentina-to-Turkey example — converting Argentine pesos to Turkish lira.
If you're trying to send money from Argentina to a supplier in Turkey, one option is to go through a bank. But here's what that actually looks like in practice.
First, the bank you're using in Argentina is likely a small or mid-sized bank that isn’t directly connected to SWIFT. So it has to route your transaction through a correspondent bank — a larger institution that is connected to SWIFT.
That correspondent bank processes the transfer, and then passes the funds to another bank that can actually send them internationally via SWIFT. That leg alone can take a full day, sometimes longer — even though the SWIFT message itself doesn’t take long to transmit. You’re dealing with institutional handoffs, batch processing, and cutoff times.
Then on the Turkey side, your supplier might also be banking with a small or mid-sized institution. That bank might also need to rely on an intermediary to receive international payments. And depending on whether you're sending U.S. dollars, euros, or another currency, there could be even more intermediary banks involved.
So all in, you’re looking at a T+1 or T+2 experience, with multiple layers of messaging and settlement delays — just to get a single payment across.
Now, I know I’m answering your question in reverse, but I think it’s important to fully understand how the legacy system works before I explain how we’re doing it differently.
Another common approach is what many fintechs use today. A company might hold treasury balances in both Argentina and Turkey — or you might have two fintechs that partner with each other, one with balances in Argentina and the other in Turkey. They debit one side and credit the other — effectively simulating real-time settlement.
But in that model, the money isn’t actually moving. No value is crossing borders — you're just offsetting balances and sending a message confirming the debit and credit.
That system can work — and it does — but it’s limited by how much money you hold in each location. It’s great for smaller transactions or remittances, where volumes are lower and you can afford to preload balances in both places. But it breaks down when you're trying to move large sums or scale across many corridors.
Will:
TransferWise model?
Bhanu:
Exactly — it’s essentially the TransferWise model. And that model works really well for remittances, because those payments are generally predictable. You know the volume is going to be $1,000 to $2,000, so you can build a pattern around it and hold enough liquidity in each corridor to support the flows.
But corporate transactions — the ones we handle — are much more variable. They’re lumpy. It could be $100,000, a few hundred thousand, $1 million, $4 million, even $100 million.
It’s just not practical to hold that level of treasury in every market to support payouts like that. So what ends up happening is that companies fall back on SWIFT to move those funds.
That’s where we’re doing something different.
What we do — and you hinted at this — is take Argentine pesos on the sending side, use a local liquidity provider to convert those into stablecoins, then move those stablecoins across the blockchain to Turkey. There, we work with a partner to off-ramp into Turkish lira, and then deliver the payout locally.
What’s powerful about that model is we’re able to use the best local banking partners for collection in Argentina, and the best ones for distribution in Turkey. Then, in between, we use an open ecosystem of liquidity providers to get the best rates — Galaxy, B2C2, Enigma, or whoever gives us the best price at that moment.
It’s far more competitive than relying on a bank to handle the full transaction. And it’s much faster. We're not measuring settlement times in days — we’re measuring in hours or even minutes.
And that kind of speed and efficiency just isn’t possible in the traditional models, especially when you’re dealing with large-scale corporate transactions.
Will:
Okay, that totally makes sense.
I guess the natural follow-up for me is this: there are companies today that do what Layer2 does using traditional rails. It’s slower, and it’s more expensive — but they’re still providing the same core service.
What’s the likelihood, in your view, that those incumbents try to integrate stablecoins in the way that you’re doing for the cross-border leg?
My hunch — and this comes from over a decade in this industry — is that incumbents often struggle to move quickly on innovations like this, even when the economics are compelling.
But I’d be curious to hear your perspective.
Bhanu:
We believe the same thing.
We’ve had conversations with incumbents — some of the largest players in the space — about integrating our stack to enable faster money movement. And the response is almost always the same.
They’ll say, “We don’t believe in digital assets,” or “Our partners won’t let us do it.” There’s always a reason. But ultimately, the real issue is that adopting this model would mean cannibalizing their existing business.
And that’s a tough ask.
To adopt what we’re doing, they would have to flip their current model upside down. Today, they make a tremendous amount of money by holding customer liquidity — by managing float. Especially infrastructure providers. They’ll go to a fintech or a neobank and say, “If you want instant delivery, you need to park a million dollars with us.” I’m making up the number, but that’s the idea. They earn yield on that float, and in return, they offer faster payments.
That’s not how we operate.
We don’t ask our clients to park funds with us. We don’t need to — we move the money directly. And that fundamentally changes the economics.
So yeah, just like you said, it’s going to take a long time for incumbents to adopt this model. And honestly, some probably never will.
Will:
I think I agree with you — again, based on experience. But at the same time, partnerships are clearly core to your business, right? Including partnerships with banks. Can you talk a little more about that?
Bhanu:
Absolutely.
As we talked about earlier, last-mile delivery isn’t possible without banks. And there are some really strong, crypto-friendly banks out there that we partner with — banks that understand the potential of what we’re building and are aligned with our vision.
These banks provide us with access to the infrastructure we need — banking rails, compliance support, settlement tools. And they’re not just in the U.S. Despite the current regulatory environment here — which, by the way, is improving — we’re working with great partners in the U.S., in Canada, in Europe, and beyond. All over the world, we’re seeing banks start to “see the light,” so to speak, and step into the space to help enable faster, more efficient money movement.
Beyond banking, our partnerships with liquidity providers and custodians are equally important.
Think of custodians like BitGo or Anchorage — they help us securely hold digital assets while they’re in transit. And on the liquidity side, partners like Galaxy play a key role in helping us on- and off-ramp large sums of money in and out of digital assets.
All of these partners are part of the stack that allows us to bridge digital and fiat systems in a scalable, secure, and compliant way.
Will:
Are there markets that are easier — or harder — for you to operate in, from a regulatory or legal standpoint?
Bhanu:
There definitely are. A number of markets around the world are still catching up when it comes to crypto regulation.
In those regions, we continue to provide service by leaning on traditional financial infrastructure — more specifically, fiat rails.
And maybe this is a good place to clarify something: we don’t consider ourselves a pure crypto payments company. We’re a payments company that leverages digital assets where we can, and fiat where we need to.
At the end of the day, we’re focused on solving a customer problem — moving money efficiently. And over time, we believe — very strongly — that all money movement will eventually happen through digital assets. It’s simply a better way to do it. But getting there is going to take time. Maybe 10 years. It’s a transition.
In the meantime, our customers still need to move funds across borders, and we want to be their one-stop solution — whether that means using crypto rails or traditional fiat infrastructure.
So yes, we do operate in markets that aren’t yet crypto-friendly. In those cases, we follow the local regulatory frameworks and rely on conventional channels to complete delivery.
Will:
Got it, that totally makes sense — and honestly, it’s a point we probably should have clarified earlier in the conversation.
So just to be clear, your core offering to B2B customers is: “We’ll process your payments.” It’s not just, “We’ll process your high-value, cross-border, same-day, or stablecoin-enabled payments.” It’s broader than that.
The value proposition is: “We’ll handle your payments,” and behind the scenes, you’ve built a platform that dynamically routes payments through different channels depending on jurisdiction, currency, volume, speed requirements — all of that. Is that accurate?
Bhanu:
Yeah, exactly.
There are a lot of variables, and the algorithms on the platform are quite sophisticated. They take into account the industry, the type of customer, whether it’s retail or corporate, the jurisdiction, and the specific requirements of the transaction.
Based on all of that, the system determines the best route for the payment and executes accordingly.
Sometimes that route is a SWIFT transaction — the very thing we’re working to displace. Other times, it’s what we call our high-speed rails — our infrastructure that uses digital assets to move money between jurisdictions more efficiently.
The system decides what’s optimal for each transaction and handles it end-to-end.
Will:
In terms of your progress to date — the stage of the company, funding you’ve raised, and any stats you’re able to share — can you tell us where things stand right now?
Bhanu:
The only stats I can share at this stage are related to our growth — I can’t disclose specific financials just yet.
But what I can say is that our volume is growing consistently — we’re seeing 20 to 30 percent month-over-month growth. We’re already processing billions per year, and that number keeps growing. We’re very excited about that and feel fortunate to be in this position.
At some point soon, we’ll be in a position to share more detailed stats around the scale of what we’re moving.
Will:
We’ll definitely look forward to that — and we’ll be happy to help amplify it when it does come out.
On the growth front, is it primarily driven by existing partners scaling up — their end customers are just using the services more? Or are you also seeing a lot of new partners coming online and ramping quickly?
Bhanu:
It’s both.
We’re seeing existing clients ramp up — some of them are completing their integrations, going live, and then steadily increasing volume. As they see how fast the transactions are, they keep expanding usage. Their own customers love the experience, so it creates a flywheel. They’re able to sign more end users and route more volume through us.
At the same time, we’re bringing on new clients at an accelerating pace. There’s been a noticeable increase in inbound interest — across multiple channels — from companies looking for a better cross-border solution.
So the growth is coming from three directions: signed clients that are ramping, signed clients that are just going live, and brand-new clients entering the pipeline.
Will:
Mike, what’s your take on the medium- to long-term competitive landscape in this space?
How defensible do you think a company like Layer2’s position is? And as you look ahead, it seems like we’re all expecting more payment volume to be facilitated by stablecoins.
But do you see a future where all fintech and financial services companies are leveraging digital assets? Or does this remain a niche that only the most innovative players are actively building around?
Mike:
I think we’re about six months into the S-curve of crypto payments.
If you look back at December 2023, Visa launched a public stablecoin dashboard — which has quickly become one of my favorite tools. Shoutout to the Visa crypto team for making that available.
According to their very conservative estimates, by the end of 2023, the run-rate volume for stablecoin settlement — specifically around payments use cases — was around $1 trillion.
The growth Bhanu’s describing at Layer2 over the past six or seven months really mirrors what we’re seeing at the market level. That $1 trillion run rate has grown to nearly $3.5 trillion in just six months. That kind of acceleration is massively underappreciated. People in the market still don’t fully grasp the scale of stablecoin payment volume right now.
For reference, that figure is more than twice what PayPal processed last year. So we’re seeing massive adoption, very quickly.
And it makes sense. When you offer a better infrastructure that can move value globally — 10 times faster and at a lower cost — there’s going to be real market pull. The adoption might feel surprising in speed, but it’s not surprising in principle. This is a clearly better solution.
Looking ahead, there’s currently about $160 billion in stablecoin float — primarily in Tether and USDC. But depending on which market forecast you look at, we wouldn’t be surprised to see that number surpass $1 trillion in the next three to five years.
That means there’s another $850 billion in float, or TVL, that’s essentially up for grabs. And we’re already seeing a wave of new issuers — stablecoin challengers — enter the space to compete with the incumbents.
But zooming back in on the near-term opportunity, crypto settlement volumes are going to continue to grow — and grow quickly. If Visa settled $12 trillion last year, and we’re already seeing $3.5 trillion in crypto settlement volume on a run-rate basis, the market is clearly sizable — but there’s still a long way to go.
As for competition and defensibility, I think the real market opportunity here isn’t about crypto companies competing against each other. It’s about displacing SWIFT and the broader traditional financial rails.
This market is massive. And I think traditional players will have a choice: either understand what’s happening and start partnering with innovators like Layer2 to lower their cost structure and better serve their customers — or risk seeing that business flow elsewhere.
Will:
Guys, this has been an incredible conversation. I really appreciate your time.
Bhanu, huge compliments to you and the team on everything you’re building. And Mike, thank you for the thoughtfulness and analysis you continue to bring to this space.
Bhanu:
Thank you, Will. It’s been a pleasure — really appreciate you having us.
Mike:
Thanks so much, Will. I really enjoyed the conversation.
Will:
Bhanu Kohli and Mike Giampapa — thank you both very much for joining us today.