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Orbital has published research on the cost of using stablecoins for foreign exchange in cross-border payments. The study found stablecoins were cheaper than two fintech providers in 30 of 32 comparisons.
It also found stablecoin pricing was broadly in line with an institutional FX desk, challenging the idea that stablecoins consistently offer the cheapest route for international payments.
Orbital analysed 27,057 indicative quotes for USDT against local currencies from 20 stablecoin liquidity providers across 52 currencies, using a USD $100,000 transaction size. It compared those quotes with pricing from two fintech providers and an institutional FX desk, measuring costs against the fiat mid-market rate.
The research found the direction of a payment had a material effect on cost. For businesses already holding USDT, converting it into local currency for outbound payments cost more than receiving local currency and converting it back into USDT in 15 of the 17 currencies reviewed.
The gap ranged from 10 to 21 basis points, adding USD $100 to USD $210 in FX costs on a USD $100,000 transaction. Brazil and Argentina were the exceptions, where collecting money was significantly more expensive than sending it.
In Brazil, converting US dollars into reais was priced seven basis points below the fiat mid-market rate, while converting reais into dollars was 83 basis points above it. That created a 90 basis point difference between the two directions of the same corridor.
Against retail-oriented providers, stablecoins generally came out ahead. They were cheaper than two leading fintechs in 30 of 32 comparisons, with savings usually ranging from 10 to 40 basis points.
That advantage narrowed sharply against institutional pricing. Stablecoins were cheaper in only six of 22 comparisons with an institutional FX desk, while the other 16 were within five basis points.
For companies that already have access to institutional FX rates, the findings suggest the savings from using stablecoins may be limited. In those cases, the report said the difference could be negligible.
Weekend shifts
The study also pointed to pronounced pricing changes over the weekend. Although stablecoin settlement runs continuously, some liquidity providers either widened their pricing sharply or stopped quoting altogether outside the working week.
Quoted conversion costs for Mexican pesos were 2.6 times weekday levels, while costs for Japanese yen rose 2.3 times. Canadian dollars and Norwegian kroner also saw costs more than double.
Traditional providers also showed wider weekend pricing. One fintech provider increased its FX fee from 0.48% on weekdays to 1.48% at weekends.
Provider gaps
The research highlighted wide differences between liquidity providers for the same conversion. In one Southeast Asian currency, one regional provider quoted a round trip at 16 basis points while another quoted 322 basis points.
Other currencies in the same region were priced between 138 and 286 basis points for a round trip, reflecting thinner competition among providers. Orbital also reported a gap of about 44 basis points between the best and worst quotes for Brazilian reais, and 19 basis points for Mexican pesos.
Luke Wingfield Digby, Co-Founder of Orbital, said: "Stablecoins can make cross-border payments cheaper, but the devil is in the details. Our research shows that the same payment can have very different economics depending on which way the money moves, who provides the liquidity and when the transaction takes place."
The report also examined USDT's valuation. Over a six-month period, Orbital found the token traded at a median price of USD $0.99922, a discount of about 0.08% to the US dollar.
On that basis, a business holding USD $1 million in USDT and valuing each token at exactly USD $1 could receive about USD $800 less than its recorded value when converting back into dollars, before fees. Orbital said that effect should not be generalised to other stablecoins because the research focused only on USDT.
The methodology covered quotes gathered between late April and early October and used indicative rather than executed pricing. The analysis excluded on-chain fees and execution outcomes such as slippage, and the institutional desk comparison was based on a shorter sampling period than the wider stablecoin dataset.
"The opportunity is significant, but realising it requires businesses to understand the true cost of each payment and access competitive pricing, rather than assuming stablecoins will always deliver the best rate," Wingfield Digby said.