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Traditional remittances vs. stablecoins: what changes in the transfer network
When someone sends money to a family member in another country, they rarely stop to think about the path that transfer takes to reach its destination.
But that path is exactly what defines how long it takes, how many intermediaries participate, and how much the other person ends up receiving.
In recent years, alongside the traditional banking circuit (banks, exchange houses, agencies like Western Union), an alternative has appeared: sending via stablecoins like USDT or USDC.
Here we compare how each circuit works, without saying which is "better", because that depends on each situation.
Download the belo app and explore what options you have available to operate with dollars and stablecoins according to your account and current terms and conditions.
How the traditional banking circuit works
In a classic bank remittance, money usually passes through several links: the sending bank, one or more correspondent banks (if the transfer is international), and finally the receiving bank or agency.
Each link can apply its own commission and its own exchange rate, making it difficult to calculate in advance how much the other person will receive.
Remittance agencies (such as Western Union or MoneyGram) simplify part of that circuit because they operate with their own network, but they still depend on banking hours, anti-fraud validations and, in some countries, cash availability at the withdrawal point.
How sending with stablecoins works
A stablecoin like USDT or USDC is designed to track the value of the dollar.
Instead of passing through correspondent banks, the transfer is made through a blockchain network (for example Tron, Ethereum or Polygon), directly between the sender's wallet and the receiver's wallet.
This eliminates some intermediaries of the traditional banking circuit, but introduces other variables typical of the crypto world: the network fee (which varies according to congestion and the chosen blockchain), the need for both parties to have a compatible account or wallet, and the regulatory and volatility risks of the crypto market in general.
Key differences between both circuits
What to check | Traditional banking circuit | Sending with stablecoins |
|---|---|---|
Intermediaries | Sending bank, correspondent banks, receiving bank | Blockchain network, sending and receiving wallet |
Business Hours | Subject to business days and hours | Can operate outside of banking hours |
Commission | Defined by bank/agency, may not be visible at the start | Network fee, variable depending on the blockchain |
Recipient requirement | Bank account or cash withdrawal | Wallet or account compatible with the stablecoin |
Exposure to volatility | None (fiat currency) | Under normal conditions, the stablecoin tracks the dollar, although it is not exempt from issuer or platform risks |
What to check before choosing a method
Before deciding how to send a remittance, it is advisable to check a few specific points:
Whether the person receiving the money already has an account or wallet ready to operate, or if you need to help them set it up first.
How much money they actually end up receiving, after fees and applied exchange rate, not just the amount being sent.
Whether the amount needs to be available in cash immediately or if it can remain as a digital balance to be used later.
What documentation each platform or bank requests to enable sending or receiving.
In belo, you can check the options available to receive dollars according to your situation and current terms and conditions.
Download the belo app and check what options you have available to send or receive money according to your country, currency and current terms and conditions.
Frequently asked questions about traditional remittances vs. stablecoins
Is it faster to send in stablecoins than by bank?
The time depends on the chosen blockchain network, whether the recipient already has the wallet ready and the validations of each platform. In the banking circuit, the time depends on business hours, correspondent banks and the destination country. Neither method has a guaranteed fixed time, and it is advisable to check the estimate within the app before confirming.
Do stablecoins eliminate transfer risk?
No. Although USDT and USDC are designed to track the value of the dollar, there are still issuer, platform and regulatory risks. They do not replace financial advice nor do they guarantee results. If you want to delve deeper into the concept, you can read about crypto dollar and how it works.
Can I combine both methods depending on the month?
Yes, many people use the banking circuit for some transfers and stablecoins for others, depending on the amount, the destination country, or if the recipient already has the account set up. Before each transfer, it is advisable to check the current conditions of each option.
