Can Digital Currencies Speed Up Money Flows?

While migration inherently involves the pursuit of better economic opportunities and financial security, migrants often find that moving money across borders is more difficult than earning it. The restrictions imposed by traditional banking channels, including strict documentation requirements and high fees, often contribute to remittance hindrances. For instance, as of Q1 2025, the global average cost of sending money abroad is 6.49%, and in Sub-Saharan Africa, it can exceed 8% (driven by hefty foreign exchange margins and outdated correspondent banking), according to the World Bank. Against this backdrop, digital currencies, including cryptocurrencies, stablecoins, and central bank digital currencies (CBDCs), are increasingly recognized as important tools for enhancing financial inclusion among migrants, particularly high-net-worth individuals navigating global remittance, settlement, and integration challenges.

CBDCs: Gateway to Cross-Border Inclusion

CBDCs, digital forms of a nation’s legal tender, are being explored by over 100 economies, with 49 countries in the pilot stage as of July 2025. In jurisdictions where traditional banking imposes restrictions, CBDCs promise cheaper and faster state-backed payments. However, interest in cross-border CBDC use cases has slowed. For instance, OMFIF’s Future of Payments 2024 report shows that only 13% of central bankers view CBDC networks as the best solution for cross-border payments (down from 31% in 2023).

Notably, the Bank for International Settlements (BIS) has exited from the China-led mBridge pilot (as of October 2024), but the project continues under the leadership of the Hong Kong Monetary Authority and its partners. While the BIS has not disclosed any specific concerns, observers note that mBridge struggles to compete with the US dollar’s role as the most liquid intermediary since direct local-currency pairs remain fragmented and costly to trade.

Furthermore, a study finds that CBDCs pose significant privacy and security risks across models, highlighting the need to understand public sentiment, learn from international experiments (for example, e-Naira’s failure), and conduct further research to build secure, trusted systems.

Until broader adoption occurs in countries that have already launched them, CBDC use for migrant transfers remains largely hypothetical. For wealthy migrants, they could eventually streamline multi-currency transfers, but practical rollout is still years away, leaving traditional remittance channels dominant.

DeFi and Remittances: Lowering Barriers

Decentralized finance (DeFi) platforms rely on blockchain and stablecoin networks to avoid intermediaries such as banks. A May 2025 BIS Working Paper finds that higher costs of traditional remittances play a significant role in low-value Bitcoin transactions and cross-border flows for stablecoins. As mentioned above, sending money abroad costs 6.49% (on average), well above the UN Sustainable Development goal of less than 3% by 2030. In comparison, DeFi remittance channels are near-instant and low-fee. Fintechs such as Remitly are also integrating stablecoins to enable faster payouts.

In Africa and Latin America, the USDC stablecoin is expanding rapidly. For example, Nubank users in Brazil, Mexico, and Colombia held 10 times more USDC by late 2024, with 30% of the total held by new digital-asset customers. Meanwhile, Lemon platform users saw over USD 137 million in USDC holdings, growing 21% in 12 months.

For high-net-worth-individuals, DeFi offers a low-cost and faster method to move funds via a regulated wallet instead of multiple bank correspondents, saving on fees and foreign exchange spreads. However, owing to a lack of full regulatory legitimacy, large transfers through crypto rails may trigger compliance risks or even lead to de-banking under certain circumstances. For instance, Hong Kong’s stablecoin bill requires enhanced due diligence for transfers over HKD 8,000.

Stablecoins as Onboarding Tools for New Citizens

Stablecoins, particularly fiat-collateralized ones, serve as digital wallets immediately accessible to migrants upon their arrival at their destination, as they can be accessed via smartphone. Until migrants open a bank account, they can still accept their salary or remittances in stablecoins and also spend them where they are accepted via crypto payment gateways or crypto debit cards.

With MiCA in force since June 2024 and the GENIUS Act becoming law in July 2025, stablecoins offer regulated, fast, cheaper, and 24/7/365 payment capabilities to high-net-worth-individuals in Europe and the USA. In parallel, other countries are moving in the same direction. For instance, effective July 2025, Bahrain introduced a stablecoin issuer licensing framework, allowing the adoption of fiat-backed tokens under strict supervision. Previously, in June 2024, the UAE central bank approved the introduction of a regulatory framework for UAE-baked stablecoins. Stablecoins’ appeal for the unbanked was highlighted in a scholarly study, which found that community-based lending circles, such as Latin American tandas, and benevolent intermediaries such as NGOs could leverage stablecoins to help the financially excluded transfer value, maintain liquidity, and build resilience to shocks.

Where CBDC efforts such as Nigeria’s eNaira faltered, stablecoins such as Tether’s USDT became a lifeline, enabling citizens to save, trade, and remit despite inflation and banking barriers. For new migrants and globally mobile individuals, this shows how stablecoins can provide immediate financial access when traditional systems fall short.

Also, an argument that CBDCs and digital rails could provide alternative onramps remains largely theoretical. Consider South Africa or Italy: over 80% of South Africans have bank accounts, yet migrants frequently cannot use them for cross-border transfers because they fail local KYC rules. Similarly, only 68% of Moroccan migrants in Italy hold bank accounts, compared with 97% of native Italians. By contrast, crypto wallets are instant for anyone with a smartphone and internet access.

However, these gains come with caveats. Stablecoin payments complicate AML/CFT compliance due to their pseudonymous nature. While issuers are required to meet strict regulatory standards, the heightened scrutiny of large migrant transactions continues to create legal uncertainty and exposes migrants to compliance and stability risks.

Uneven Benefits: Wealthy Migrants and Beyond

CBDCs, DeFi, and stablecoins offer outsized gains to affluent migrants. Yet an advantage such as avoiding bank correspondent fees (that a retail migrant must pay) merely tops the pyramid, since wealthy migrants already enjoy perks including access to private financial advisors, global banking, and tax specialists. So, the bigger leap forward is for underserved migrants; otherwise, the risks may outweigh the rewards.

On one hand, emerging digital channels promise inclusion for those previously ‘unbanked,’ while on the other hand, policy support, customer protections, and literacy programs play a significant role in the successful and even adoption. In addition, since public blockchains are traceable, they can amplify surveillance, destabilize the financial system, or lead vulnerable migrants into costly debt traps through easy credit access.

As a result, vigilant governance and careful deployment of digital currencies are key to ensuring global mobility is smoother and more secure for both wealthy individuals and ordinary migrants.