Stablecoins will not be enough

Svapnil Ankolkar | 2025-02-26

The opportunities in solving real world money movement will be far bigger than the scope of stablecoins.

The software infrastructure that powers the world economy is being written and rewritten at a faster pace than ever before. LLMs will enable software developers to rewrite critical infrastructure underpinning our economy. Most of our critical infrastructure are programs that move money.

What will it take to build the next generation of social services like Social Security? Stablecoins have been rapidly growing to enable remittance in corridors without stable currencies, but some of the most critical work to be done will be enabling developers and their coding agents to rebuild classic payment businesses in the world’s largest economies.

The truth is that while stablecoins will play an important role in the world economy over the next few decades, innovations in traditional fiat money movement, specifically open standards like ISO20022 and instant bank transfer rails like Real Time Payments will play an even more important role at rebuilding the world’s most important services.

The Growth of Stablecoins

Across the world, hundreds of millions of human beings live and work in countries without stable currencies. The money they earn can’t be saved, they do not have access to financial services, and they cannot financially plan for a future by building wealth. The corridors between the western world and these countries are underdeveloped and expensive. SWIFT is more concerned, rightfully so, about the $1B wire between Hong Kong and London than the $100 payment between the U.S. and Argentina.

This is where stablecoins will play an important role. Dollar-denominated stablecoins like USDC are already playing a critical role for remittances between countries like the U.S. to countries in LatAm and Africa.

Crypto has and always will be important hedge against the tyranny of governments, which hold tight and sometimes poor control of their currencies. Inflation in Argentina was 211.4% in 2023. Perhaps it would be better if they transacted in USD, which inflated 4.1% during the same period.

Coming Back to Earth

Why hasn’t there been any major ($100B+) businesses in countries with developed payment systems like the U.S, China, and the U.K. that solely rely on stablecoins? The truth is obvious: nothing beats money that is sent directly to your bank account.

Talentir, an Austrian startup that builds better ways to payout Youtube creators, quickly realized during their rapid growth that they needed to build bank payouts to serve their biggest users. Talentir sends bank payments using SEPA, the ACH of Europe. Today, SEPA transfers are instant, effectively free, and universally accessible within Europe. Tomorrow, the same work is happening in countries like the U.K, Australia, and the U.S, which payment rails like FedNow.

In the real world, payments volume is measured in the trillions.

Payments volume by settlement network. Sources: ARK Invest, FRB Services, ECB, NACHA

Across the world, bank transfers are getting faster, cheaper and simpler: the entire world is standardizing upon a standard interface called ISO20022. If the blockchain is the settlement layer in crypto, the settlement layer for fiat money are the settlement networks: the Federal Reserve, the European Payments Council, and others. One by one, they’re starting to support instant settlement using a uniform rail, allowing businesses across the world to send bank transfers as easily as sending crypto.

The Challenge of the Future

What will it take to build the next Social Security or the next Medicare? I believe that stablecoins aren’t the only answer - better fiat rails are. I believe that most payment volume in developed countries will not be moving to stablecoins - instead they will moving money through better bank rails that offer the same functionality.

In the U.S, payment rails like RTP are emerging as alternatives to decentralized settlement networks like Solana. One major challenge remains: interacting with the banking system is opaque and difficult. Open standards emerging, like ISO20022, are going to change that. ISO20022 is a standard adopted by virtually every bank in the world that allows standard format messages to be sent to them. Every modern payment rail in the world uses ISO20022, like RTP, Fedwire, and FedNow in the U.S, SEPA in the European Union, and CNAPS in China.

In order to unlock the next $10T of economic growth, we need to arm developers with the tools to build the next generation of services that move money. iso20022js.com is an open source library built to make sending bank payments as easy as sending money with crypto. It’s currently one of the most popular open source bank transfer libraries on the internet and the first library to allow you to create RTP payments in Typescript.

Here’s an example of how to send money using U.S. Real Time Payments with iso20022js.com:

// Create an RTP ISO20022 Message using iso20022.js
const payment = checking.createRTPCreditPaymentInitiation([
    {
        type: 'rtp',
        direction: 'credit',
        amount: 100000, // $1000.00
        currency: 'USD',
        creditor: {
            name: 'All-American Dogs Co.',
            account: {
                accountNumber: '123456789012',
            },
            agent: {
                abaRoutingNumber: '37714568112',
            }
        },
        remittanceInformation: '1000 Hot Dogs Feb26',
    }
]);

// Send using fiatwebservices.com
client.payment_transfers.send(payment)

Crypto will play an important role as the check and balance against the tyranny of governments. No one should live in a society where the money they earn will be worth half as much in a years time. In this sense, crypto is aligned with the American value of preserving human rights and liberties.

By making fiat payments easier for developers to use, we have the potential to reinvent the most important parts of society. One day in the near future, engineers will architect a better, faster version of Social Security for the U.S. Government. It will certainly use ISO20022 to orchestrate money movement, and there’s a good chance they’ll be using iso20022js.com to do it.

If you’re interested in working on the future of money or are rebuilding critical parts of the world economy, I’d love to hear from you. Shoot me an email at svapnil@woodside.sh if this is you.

If you’re looking for information on how to build applications that interact with banks, check out iso20022.js and feel free to give it a star on Github.

https://github.com/Svapnil/iso20022.js