When payments people tell you we have 'instant' cross-border, they're lying.

What we have: $25M pre-funded in foreign banks so transfers LOOK instant.

Stablecoins will eliminate pre-funding entirely. 

Here's the phase transition most are missing 🧵

Fintech Nerd. Author of www.fintechbrainfood.com

1/ 

"'Instant' Brazil transfers aren't instant. They're pre-funded.

For a $100M annual corridor, payment companies park $8-25M in Brazilian banks overnight. That's $240K-1.25M in annual funding costs.

Your 'instant' transfer? Theater built on massive capital inefficiency.

4/ Smart payments people think stablecoins are just another rail for "exotic currencies."

They're missing the transition: When both USD and local currencies live on-chain, FX becomes instant.

- No correspondent banks. 
- No pre-funding. 
- No settlement lag. 

USDC → BRZ. Done.

3/ Same $1M with on-chain FX:

DEX spread: $500-1,500
Network fees: $50
Pre-funding: $0 ❌
Compliance: $500

Total: $1,000-2000 (10-20 bps)

For a possible 85-90% cost reduction

2/ 

A $1M cross-border transfer actually costs:

Base FX spread: $4,000-6,000
Pre-funding allocation: $1,500-2,500
Correspondent fees: $2,000 (operational overhead)
Risk buffers: $1,000
Compliance: $500

Total: $9,000-12,000 (90-120 bps)