Stablecoin growth will test 24/7 FX liquidity, TransFi CEO says

Raj Kamal, founder and CEO of payments firm TransFi, says the rapid rise of local‑currency stablecoins is pushing the need for round‑the‑clock foreign‑exchange (FX) liquidity. While blockchain settlement can run continuously, access to deep currency markets remains tied to traditional FX trading hours.

Local‑currency stablecoins shift FX activity on‑chain

More than 70% of flows from fiat into US‑dollar stablecoins start in a non‑dollar currency, according to data cited by Kamal. Issuing tokens pegged to the euro, sterling, yen and other local currencies would move that conversion step onto the payment chain, increasing on‑chain FX demand.

Liquidity challenges outside core trading windows

Continuous token transfers do not guarantee continuous access to deep FX markets. A corporate treasury moving funds late on a Friday or during Asian market hours may face thinner liquidity, wider spreads and higher fees. Market makers must decide how much inventory to hold and what risk premium to charge for off‑hour exposure.

Dollar‑stablecoins likely to remain key intermediaries

Even as local‑currency tokens appear, the US dollar dominates stablecoin market value (99.4% of fiat‑backed stablecoins) and FX trading (89% of all FX trades). Consequently, many cross‑border payments may still route through a dollar‑stablecoin to obtain better depth and pricing.

Fragmentation could dilute liquidity

More issuers, currencies and blockchains increase settlement options but also spread liquidity across multiple venues. Each conversion step may require a separate market and technical connection, raising inventory costs for market makers and potentially increasing transaction costs for large corporate payments.

Bank involvement and shared infrastructure

Banks are launching their own stablecoins (e.g., Revolut’s EURR, Standard Chartered’s HKDAP) and exploring shared liquidity pools. A consortium of 21 U.S. institutions plans a joint dollar‑stablecoin in early 2027, with possible expansion to other G7 currencies, aiming to pool distribution and liquidity.

Implications for corporate treasuries

Corporate users will prioritize execution certainty, predictable pricing and sufficient depth over mere token availability. Providers that can offer multi‑currency, 24/7 FX liquidity and seamless redemption pathways are likely to gain a competitive edge.