Core Insights - Stablecoins are becoming a significant financial innovation, with a market dominated by USDT ($175 billion) and USDC ($75 billion) [1] - The cross-border and remittance use case for stablecoins shows the most growth potential, as USD-denominated stablecoins are replacing SWIFT for smaller transactions [1][2] Group 1: Market Dynamics - Stablecoins currently account for less than 1% of global money flows, but they are emerging as faster and cheaper alternatives in remittances, B2B payments, and e-commerce [3] - The traditional SWIFT system is being disrupted as USD stablecoins serve as the new transmission rail for dollar transfers, providing programmability and 24/7 availability [2] Group 2: Challenges and Solutions - A mismatch exists between the digital world of USD stablecoins and the local fiat economy, creating friction for liquidity providers who must bridge these two states of money [5] - FX-on-chain protocols aim to resolve this issue by enabling direct swaps between USD stablecoins and local-currency stablecoins, collapsing the two-state problem into a single digital state [6] Group 3: Advantages of FX-on-chain - The implementation of FX-on-chain provides key advantages such as hedging in high-inflation economies and enhancing cross-border payments and remittances [7] - Instant conversion allows USDC/USDT holders to sell directly into local stablecoins, which can be redeemed for fiat instantly [9] - Flow matching enables real-time netting of global remittance flows and corporate flows, recycling liquidity continuously [9]