The stablecoin sandwich has become one of the most persuasive models for explaining how digital currencies like stablecoins can improve cross-border payments.
The way the sandwich gets made is typically as follows: A business begins with fiat currency inside the regulated financial system. The money is converted into a stablecoin, transferred across a blockchain network and then exchanged back into local fiat currency at the destination. Traditional banking infrastructure serves as the bread. Stablecoins provide the faster, more programmable settlement layer in the middle.
But the sandwich analogy obscures the hardest part of institutional adoption. Moving the money is only one component of a cross-border transaction. The system must also determine who is sending it, who is receiving it, whether both parties are authorized to transact and whether the purpose of the payment is legitimate across every jurisdiction it touches.
Blockchains can validate that a transaction occurred. They cannot, by themselves, validate that it should have occurred.
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Cross-Border Settlement Is Evolving Faster Than Its Trust Controls
The traditional cross-border payment system is slow partly because it repeatedly verifies information. The stablecoin sandwich compresses the payment path, but it does not eliminate the underlying obligations.
That distinction matters as stablecoin payments move from crypto-native use cases into institutional finance. A transaction may settle successfully on a blockchain while leaving banks, payment companies and corporate users with unresolved questions about who verified the sender, who validated the recipient, which compliance standards were applied and whether each participant can rely on the work performed by the others.
In many cases, stablecoin sandwiches can even separate the transaction’s settlement obligations across a more fragmented set of participants, including banks, stablecoin issuers, exchanges, payment processors, wallet providers, liquidity partners and local payout companies.
The result is a payment that can be technically unified and institutionally fragmented at the same time.
Consider a business in Jurisdiction A paying a supplier in Jurisdiction B. A regulated provider verifies the sending company, accepts fiat and converts it into stablecoins. A second provider receives the stablecoins, converts them into local currency and pays the supplier.
Each institution may have performed customer due diligence. But several questions remain.
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Can the receiving institution rely on the sender verification completed by the originating provider? Does the originating provider understand how the recipient was validated? Are both firms applying equivalent standards for beneficial ownership, sanctions screening and transaction monitoring? Who is responsible if customer information changes after onboarding? Which party investigates if the payment pattern appears suspicious only when viewed across both sides of the transaction?
These are not simply compliance details. They determine whether regulated institutions can safely scale the model.
Today, trust frequently moves through the system less efficiently than value. Payment participants exchange documents, attestations and risk signals through bilateral integrations, manual reviews and proprietary compliance processes. A stablecoin may cross borders in seconds while the information required to approve, reconcile or investigate the transaction remains trapped in separate databases.
That imbalance creates a new version of an old payments problem: The asset moves faster than the context surrounding it.
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Blockchain Interoperability Is Becoming a Cross-Border Governance Problem
The stablecoin sandwich is operationally viable. What it lacks is not another settlement rail, liquidity pool or blockchain network. It lacks a coordinated system for proving that every participant, obligation and transaction can be trusted from one side of the payment to the other.
“We think of stablecoins as rails,” Mastercard Executive Vice President of Blockchain and Digital Assets Raj Dhamodharan told PYMNTS. “Each stablecoin can be thought of as a global ACH (automated clearing house), where the consumer doesn’t see the complexity.”
“The technology underneath this is quite powerful,” Dhamodharan said. “But that alone is not sufficient. To unlock the full value, really that orchestration needs to be provided.”
Until the industry builds an interoperable trust layer, stablecoin-based cross-border payments may continue to succeed corridor by corridor and provider by provider without becoming a genuinely unified institutional network.
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“It’s very reminiscent of what happened in the early 2000s with payment innovators,” Citi Global Head of Digital Assets, Treasury and Trade Solutions Ryan Rugg said during a recent episode of “From the Block,” the PYMNTS podcast. “Initially, people thought they were going to put banks out of business. Instead, they ended up running on bank rails.
“Removing reliance on intermediaries can help with improving on speed and fiat settlement,” Rugg said, stressing that regulators and industry participants will need clarity on how the new account works, how it will be supervised, and how operations will function.
“The big thing is same risk, same activity, same regulation,” she said.
The industry’s next challenge is therefore not to slow settlement, but to make trust travel at the same speed as value. Until then, the stablecoin sandwich will remain technically complete but institutionally unfinished. The money can enter, travel and exit. But that doesn’t mean businesses will want to touch it.
Data in “Waiting for Certainty: Why Most CFOs Are Holding Back on Crypto and Stablecoins”, a recent installment of PYMNTS Intelligence’s 2026 Certainty Project, shows that most middle market companies remain cautious about digital assets: 13% of firms use stablecoins and just 5% use other cryptocurrencies.
