What Is the Stablecoin Sandwich?
Written by Max Crawford
Cross-border payments still run on infrastructure built for fax machines. A wire transfer from the US to Brazil can take three days, bounce through four intermediary banks, and lose 6-12% of its value to fees and exchange rate markups. Meanwhile, stablecoins settled $33 trillion in 2025—more than Visa and Mastercard combined—with transactions completing in minutes for pennies.
The stablecoin sandwich bridges these two worlds. It keeps the familiar fiat currencies that businesses and individuals actually use while routing the payment itself through blockchain rails. The result: same-day settlement, transparent fees, and a complete audit trail that correspondent banking can’t match.
What Is a Stablecoin Sandwich?
A stablecoin sandwich is a cross-border payment model where money starts as fiat currency, converts briefly to stablecoins for transit, and converts back to fiat at the destination. The “sandwich” metaphor captures the structure: fiat on both ends, stablecoins in the middle.
Think of it like shipping a package internationally. Correspondent banking passes your package through five different postal services, each taking a handling fee and operating on their own schedule. The stablecoin sandwich puts your package on a direct flight—same origin, same destination, without the stops in between.
The model works because stablecoins (digital tokens pegged 1:1 to currencies like the US dollar) carry value across blockchain networks instantly, while regulated on-ramp and off-ramp partners handle the conversion at each end. Recipients receive local currency in their bank account without ever touching crypto themselves.
How Does a Stablecoin Sandwich Work?
The stablecoin sandwich replaces the correspondent banking chain with a three-step flow:
Step 1: On-Ramp (Fiat to Stablecoin)
The sender’s local currency—euros, dollars, pesos—converts to a stablecoin through a licensed on-ramp provider. This step includes standard compliance checks: know-your-customer (KYC), anti-money laundering (AML) screening, and sanctions verification. The conversion happens at local market rates, so the sender gets competitive pricing without international markups.
Behind the scenes, the on-ramp provider issues or purchases stablecoins (typically USDC or USDT) backed 1:1 by reserves held at regulated financial institutions. Each token represents a real dollar sitting in a bank or invested in short-term treasuries.
Step 2: Transfer (Stablecoin Transit)
Once converted, the stablecoins move wallet-to-wallet across a blockchain network. Settlement happens in seconds or minutes depending on the chain—and the transaction is final, auditable, and visible in real time.
This single step solves three problems at once:
Settlement speed: No waiting for correspondent banks to reconcile at end-of-day
Global availability: Works 24/7, including weekends and holidays
Transparency: Every transaction publishes to a public ledger with precise timestamps
Unlike SWIFT messages that can sit in queue at each intermediary, blockchain transactions either confirm or fail. There’s no ambiguous “in transit” status leaving working capital stuck in limbo.
Step 3: Off-Ramp (Stablecoin to Fiat)
At the destination, an off-ramp partner converts the stablecoins back to local currency using local liquidity. The funds settle via local payment rails—PIX in Brazil, SPEI in Mexico, Faster Payments in the UK—and land in the recipient’s bank account or mobile wallet, often within the same business day.
From the recipient’s perspective, it looks like any other bank transfer. They never need to interact with crypto directly.
Because each conversion happens locally rather than across borders, both sender and recipient benefit from better exchange rates. The international hop—traditionally the most expensive part—happens on-chain for near-zero cost.
The Stablecoin Sandwich Architecture
Behind a simple-looking payment flow sits a multi-layer infrastructure stack:
Issuance layer: Where stablecoins are created (minted) and backed by reserves. Compliant issuers hold dollars in regulated banks and publish regular attestations proving 1:1 backing.
Payment layer: Networks that connect traditional financial institutions, banks, and local payment methods to stablecoin rails. This layer handles the on-ramp and off-ramp conversions.
Orchestration layer: Middleware that routes payments, manages liquidity across regions, and coordinates between banks, payment processors, and blockchain networks. This is where compliance, FX optimization, and settlement logic live.
Blockchain layer: The settlement infrastructure where stablecoins actually move. Enterprises can use public chains or deploy dedicated payment-focused chains for greater control over costs, performance, and compliance. This layer requires reliable node infrastructure to read and write blockchain data at scale—the foundation that makes everything above it work.
Alchemy provides the node infrastructure powering stablecoin payments across 100+ blockchain networks, processing over $150 billion in annual transaction volume. Major financial institutions including Visa, Stripe, and Robinhood rely on Alchemy’s APIs for their blockchain operations.
For businesses that don’t want to stitch together multiple providers, consolidated platforms handle the full fiat-to-stablecoin-to-fiat flow through a single API—but under the hood, they’re typically built on infrastructure like Alchemy’s.
Full Sandwich vs. Open Sandwich
Two variants of the stablecoin sandwich serve different use cases:
Full Stablecoin Sandwich
The full sandwich automates the entire flow: fiat in, stablecoin transit, fiat out. The recipient receives local currency without any crypto exposure—they may never know stablecoins were involved. This model suits:
Vendor payouts where suppliers expect local currency
Payroll for international employees who bank locally
B2B invoicing where accounts receivable shouldn’t need to manage crypto
Open Stablecoin Sandwich
The open sandwich completes the on-ramp but keeps funds in stablecoins at the destination. Recipients hold dollar-pegged tokens in a wallet and decide when (or whether) to convert to local currency. This model suits:
Remittances to countries with volatile local currencies, where recipients may prefer holding dollars
Contractor payments where workers want dollar exposure
High-inflation markets where stablecoin wallets serve as a hedge against local currency devaluation
Recipients can earn yield on stablecoin holdings, spend directly with stablecoin-enabled merchants, or off-ramp when local rates are favorable.
| Feature | Full sandwich | Open sandwich |
|---|---|---|
Recipient experience | Local currency in bank | Stablecoins in wallet |
FX timing | Automatic at transfer | Recipient chooses |
Dollar exposure | None | Yes |
Complexity for recipient | Lower | Higher |
Best for | Payroll, vendor payments | Remittances, freelancers, treasury |
Why Is the Stablecoin Sandwich Better Than Traditional Payments?
Correspondent banking requires banks to pre-fund accounts (called nostro accounts) in countries where they want to send money. Industry estimates suggest trillions of dollars sit trapped in these accounts globally—capital that does nothing but keep the system running. The stablecoin sandwich eliminates that requirement entirely.
Beyond freeing up capital, the model improves on correspondent banking across four dimensions:
Speed
Traditional wire transfers take 2-5 business days, longer for exotic corridors. Each correspondent bank in the chain processes the transaction on its own schedule, with cutoff times and banking holidays adding unpredictable delays.
Stablecoin transfers settle in minutes, regardless of origin or destination. The blockchain operates continuously—no Friday afternoon cutoff, no Monday morning queue. For businesses managing cash flow across time zones, that predictability matters.
Cost
The World Bank reports that sending remittances costs an average of 6.49% globally. Banks charge even more—12.66% on average—due to correspondent banking fees, hidden FX markups, and service charges.
The stablecoin sandwich replaces that stack with two local conversions and one near-zero-cost blockchain transfer. Total fees depend on the specific corridor but typically run 1-3%, with savings compounding on high-volume flows.
Transparency
Anyone who’s chased a stuck wire transfer knows the frustration: the payment left your bank, but nobody can tell you where it is or when it will arrive. SWIFT messages pass through intermediaries that don’t share status in real time.
Blockchain transactions publish to a public ledger. Both parties can verify exactly when the transfer cleared, which wallet received it, and what the transaction cost. That transparency simplifies reconciliation, speeds up dispute resolution, and provides a clean audit trail for compliance teams.
Reach
Correspondent banking doesn’t serve every corridor well. Smaller or riskier markets often lack direct banking relationships, forcing payments through multiple hops that compound costs and delays. Some corridors require pre-funding nostro accounts, tying up working capital for days or weeks.
Stablecoins work wherever there’s an on-ramp and an off-ramp. The same infrastructure that sends USDC from New York to London works for payments to Lagos or São Paulo. As stablecoin liquidity expands globally, the sandwich model opens corridors that traditional rails struggle to serve.
What Are the Risks and Challenges?
The stablecoin sandwich isn’t frictionless. Businesses considering it should understand the tradeoffs:
Regulatory Variation
Rules governing stablecoins vary by jurisdiction and continue to evolve. The EU’s Markets in Crypto-Assets (MiCA) regulation now requires licensed issuers and transparent reserves. The US passed the GENIUS Act in 2025, establishing federal standards for stablecoin issuers. Other markets—Singapore, Hong Kong, the UK—have their own frameworks in progress.
Transactions over $3,000 typically require Travel Rule compliance, meaning identifying information must accompany the payment similar to wire transfers. Businesses need partners who operate within these regulatory boundaries, with proper licensing, reserve attestations, and compliance infrastructure.
Counterparty Risk
Not all stablecoins are equally safe. The safest issuers hold 100% reserves in high-quality liquid assets (cash and short-term treasuries), publish regular attestations, and operate under regulatory oversight. Poorly managed stablecoins can depeg from their target value or fail entirely.
Most institutional flows run through USDC or USDT, which together represent over 90% of the stablecoin market. USDC in particular has built credibility with transparent reserves and US regulatory compliance.
Integration Complexity
Implementing stablecoin payments requires connecting to on-ramp/off-ramp providers, managing blockchain wallets, and handling compliance across multiple systems. API-first platforms abstract much of this complexity, but there’s still integration work involved.
For treasury teams accustomed to wire transfers, the learning curve includes new concepts (wallets, gas fees, blockchain confirmations) and new risk vectors (private key management, smart contract security). Working with established infrastructure providers—like Alchemy’s enterprise platform—reduces this burden with battle-tested APIs, SOC 2 Type II compliance, and 99.99% uptime guarantees that meet enterprise requirements.
Liquidity Depth
Stablecoin sandwich efficiency depends on liquid on-ramp and off-ramp markets at both ends of the corridor. Major currency pairs (USD/EUR, USD/GBP) have deep liquidity. Emerging market currencies may have thinner markets, leading to higher spreads or minimum transfer sizes.
This is improving as adoption grows, but businesses should verify liquidity for their specific corridors before committing.
Which Corridors Work Best?
The stablecoin sandwich delivers the biggest impact on corridors where traditional banking is slowest, most expensive, or least reliable:
Latin America (US-Mexico, US-Brazil): High remittance volumes, mature off-ramp infrastructure (PIX, SPEI), and strong demand for dollar exposure make these corridors natural fits. Local currency volatility in some markets makes the open sandwich particularly attractive.
Sub-Saharan Africa (Nigeria, Kenya): Limited correspondent banking relationships and high traditional costs create opportunity. Mobile money integration (M-Pesa) enables off-ramping even where traditional banking is sparse.
Asia-Pacific (Philippines, India): Large diaspora populations drive remittance demand. Regulatory frameworks are maturing, and local payment rails are well-developed.
For corridors with deep, liquid banking relationships (US-UK, US-EU), the cost advantage may be smaller—but the speed and transparency benefits still apply.
Who’s Using Stablecoin Sandwiches Today?
The model has moved from concept to production across several categories:
International Supplier Payments
Exporters and importers settle invoices faster using stablecoin rails. Instead of waiting 3-5 days for a wire to clear—and delaying shipments until payment confirms—settlement happens within hours. Finance teams get timestamped records for every transaction, eliminating reconciliation headaches.
Global Payroll
Platforms paying contractors and remote employees across dozens of countries use the sandwich to standardize timing and reduce costs. Employees can receive local currency or hold dollar-pegged stablecoins. The payment flow works identically whether the recipient is in Berlin or Buenos Aires.
Marketplace Payouts
Marketplaces struggle with slow seller payouts and working capital tied up across multiple currencies. The stablecoin sandwich lets platforms hold centralized stablecoin liquidity, execute instant global payouts, and off-ramp locally—reducing the capital buffer they need to maintain.
Treasury Operations
Multinationals use stablecoin rails to rebalance liquidity between regions faster than internal bank transfers allow. Converting regional balances to USDC, transferring across the blockchain, and off-ramping at the destination takes hours rather than days—even on weekends when banking systems are closed.
Remittances
Remittance providers use the sandwich to cut costs in expensive corridors. Funds enter as local cash, ride as stablecoins, and land as local cash or mobile money on the other end. Settlement happens same-day. Some providers offer recipients the choice to hold stablecoins as a hedge against local currency volatility.
What’s Next for Stablecoin Payments?
The stablecoin market has grown to $270 billion and processed $33 trillion in transactions during 2025. JPMorgan projects the market could reach $500-600 billion by 2028, with payments driving adoption beyond crypto trading.
Several developments are accelerating the shift:
Regulatory clarity: MiCA in Europe and the GENIUS Act in the US give compliant issuers a clear path forward. Regulated stablecoins can now compete for institutional volume that previously stayed on traditional rails.
Bank participation: Major financial institutions are piloting stablecoin-based settlement. As banks integrate stablecoin rails, corporate treasury teams gain access without building new infrastructure.
Payment-native blockchains: New Layer 1 networks are emerging purpose-built for payments, with features like stablecoin-denominated gas fees, instant finality, and built-in compliance hooks. Stable uses USDT as native gas, eliminating fee volatility. Arc, Circle’s stablecoin-focused chain, includes native FX capabilities for cross-border settlement. Alchemy provides the primary infrastructure for these payment-native networks, enabling sub-second transaction finality and the reliability that enterprise treasury operations require.
API abstraction: Platforms increasingly offer the stablecoin sandwich as a managed service. Businesses can access blockchain-speed payments without managing wallets, gas, or on-chain operations directly.
How to Get Started
For businesses exploring stablecoin-based cross-border payments:
Identify your pain points: Which corridors are slowest or most expensive? Where does payment timing create cash flow friction? The sandwich delivers the biggest ROI on high-volume, high-friction routes.
Start with one corridor: Test with a single high-value payment route (say, US-Mexico or US-Brazil) before rolling out broadly. Measure actual speed, cost, and reliability against your current process.
Evaluate your stack: You’ll need providers across the architecture layers—issuance (Circle for USDC), on/off-ramp partners for your corridors, and blockchain infrastructure. For the infrastructure layer, Alchemy supports 100+ chains with the APIs and reliability enterprises require.
Plan for compliance: Ensure your providers handle KYC/AML and that the audit trail meets your regulatory requirements. The blockchain record should strengthen, not complicate, your compliance posture.
The stablecoin sandwich won’t replace correspondent banking overnight. But it’s already proving that cross-border payments don’t have to cost 6% and take three days. For businesses ready to explore, Alchemy’s fintech solutions can help you build on the blockchain layer—the foundation that makes everything else possible.
Frequently Asked Questions
What is a stablecoin sandwich payment?
A stablecoin sandwich is a cross-border payment method where the sender’s fiat currency converts to stablecoins, transfers across blockchain networks, and converts back to the recipient’s local fiat currency. The name comes from the structure: fiat “bread” on both ends with stablecoin “filling” in the middle.
How fast is a stablecoin sandwich payment?
Most stablecoin sandwich payments settle within minutes to hours, compared to 2-5 business days for traditional wire transfers. The blockchain transfer itself takes seconds to minutes; overall timing depends on the on-ramp and off-ramp providers.
What stablecoins are used in the sandwich model?
USDC and USDT are the most common, representing over 90% of the market. USDC is popular for institutional use due to its transparent reserves and US regulatory compliance. Some corridors also use regional stablecoins like EURC (euro-backed).
Is a stablecoin sandwich cheaper than a wire transfer?
Generally, yes. Traditional cross-border payments cost 6-12% of the transfer amount. Stablecoin sandwich payments typically cost 1-3%, with savings coming from eliminating correspondent banking fees and getting better FX rates through local conversions.
Do recipients need to use crypto?
Not with the “full sandwich” model—recipients receive local currency directly in their bank account. The “open sandwich” variant keeps funds in stablecoins, giving recipients control over when to convert, but this requires them to manage a stablecoin wallet.
Are stablecoin sandwich payments regulated?
Yes. The EU’s MiCA regulation and the US GENIUS Act establish requirements for stablecoin issuers, including 1:1 reserve backing and compliance with Bank Secrecy Act standards. Transactions over $3,000 require Travel Rule compliance with identifying information similar to wire transfers.
What are the risks of stablecoin payments?
Key risks include counterparty risk (stablecoin issuer reliability), regulatory variation across jurisdictions, and liquidity constraints in some emerging market corridors. These risks can be mitigated by using established stablecoins like USDC and working with licensed providers.
Which corridors work best for stablecoin sandwiches?
Latin America (US-Mexico, US-Brazil), Sub-Saharan Africa (Nigeria, Kenya), and Asia-Pacific (Philippines, India) combine high remittance volumes, local currency volatility, and mature off-ramp networks. These corridors often have the highest traditional costs, making the savings most significant.
Can businesses use stablecoin sandwiches for payroll?
Yes—global payroll is a primary use case. Companies can pay international contractors and employees faster and at lower cost than traditional wire transfers. Employees can receive local currency or opt to hold dollar-pegged stablecoins.
What infrastructure do I need to build stablecoin payments?
A complete stablecoin sandwich requires four layers: stablecoin issuance (typically through Circle for USDC), on-ramp/off-ramp partners for fiat conversion, orchestration middleware for routing and compliance, and blockchain infrastructure for settlement. For the blockchain layer, you need reliable node infrastructure to read and write transactions at scale. Alchemy provides enterprise-grade APIs across 100+ chains, with the uptime and compliance certifications (SOC 2 Type II) that financial institutions require.
