Transforming Cross-Border Payments: Circle and Mastercard Take the Lead

Surprisingly, in 2025, moving money internationally still feels more like sending a letter by sea than sending an email.

Today’s cross-border payment infrastructure is slow, expensive, and outdated. When a business or individual sends money abroad, the payment often passes through multiple correspondent banks before reaching the recipient. Each intermediary — operating under the SWIFT messaging framework — charges its fees, performs its own compliance checks, and adds its layer of friction. Settlement can take anywhere from one to five business days. Worse, transparency is minimal: senders rarely know the payment status, and final costs are unpredictable due to hidden fees and foreign exchange spreads. A simple international transfer can cost over 6% of the amount sent.

Blockchain technology offers a vision of change. With stablecoins, value can move globally, 24/7, without the need for correspondent banks. Settlement happens in minutes, not days. Transaction records are publicly auditable, and costs can be dramatically reduced. However, blockchain alone does not solve everything. Traditional institutions require strong compliance frameworks, governance, fraud prevention, and interoperability with fiat systems. Managing crypto wallets, bridging blockchains, and ensuring AML/CFT compliance remain significant hurdles. For global commerce, a payment solution must combine the openness and programmability of blockchain with the trust, security, and regulatory standards of traditional finance.

At present, crypto payments occupy a divided reality. For individuals, peer-to-peer transfers using wallets and stablecoins are fast and easy — ideal for remittances or casual payments. These transactions are direct, low-cost, and almost globally accessible. However, for businesses, crypto payments introduce a web of accounting, regulatory, and operational complexities. Companies must decide how to recognise and report digital asset transactions on their balance sheets. This often requires intermediaries to convert between fiat and crypto. Depending on the jurisdiction, this conversion may need to occur at the point of origin or the point of receipt. Some countries go further, prohibiting businesses from receiving crypto as payment for goods and services altogether. This patchwork of rules and frictions makes cross-border crypto payments inconsistent and, in many cases, impractical for enterprises.

This is precisely the challenge Circle and Mastercard are now working to solve — by building infrastructure that merges the strengths of blockchain with the requirements of regulated finance. Circle has announced the Circle Payments Network (CPN), a blockchain-native platform that enables financial institutions to transfer value using regulated stablecoins. Although the CPN has not yet launched commercially, the company has confirmed that the network is expected to go live in a limited capacity in May, with a select group of licensed financial institutions participating in the initial rollout.

CPN is not a retail-facing app or consumer wallet. It is designed as a protocol layer — a programmable network where institutions interact using smart contracts and shared protocols. Rather than moving fiat across borders through legacy channels, CPN coordinates stablecoin movements between parties based on agreed-upon rules and APIs. This architecture allows for fast, auditable, and programmable settlement without abandoning regulatory expectations.

CPN enables an Originating Financial Institution (OFI) — say, a US bank — to discover a Beneficiary Financial Institution (BFI) — for example, a payment company in the Philippines — through a trusted network. It orchestrates the full flow: from compliance verification (including Travel Rule data), to quoting FX rates, to final settlement on public blockchains like Ethereum or Solana. Payments can be initiated in fiat currencies, converted into USDC or EURC, and seamlessly transferred across borders. Recipients can choose to hold stablecoins or instantly off-ramp into local currencies through regulated partners.

While Circle is positioning CPN as a tool for global payment efficiency, its ambitions are broader. The network is initially targeting remittances — a high-friction, high-cost segment — but Circle ultimately aims to rival the scale and functionality of traditional payment giants like Mastercard and Visa. In doing so, it is not just offering a new tool, but presenting a structural alternative to incumbent financial infrastructure.

Crucially, CPN represents one of the most advanced efforts yet to achieve real convergence between crypto-native architecture and traditional financial systems. Rather than building a parallel ecosystem, Circle is integrating stablecoins into the institutional world by extending the reach of decentralised infrastructure into regulated environments. In doing so, it is expanding the scope of decentralised finance (DeFi) itself.

DeFi, at its core, is a multilayer system composed of five foundational layers:

1. Settlement Layer: Public blockchains like Ethereum or Solana, where transactions are executed and recorded.
2. Asset Layer: Includes native tokens, wrapped assets, and stablecoins — such as USDC and EURC — that facilitate exchange and collateralisation.
3. Protocol Layer: Smart contracts that enable core DeFi functions like decentralised exchanges (DEXs), lending markets, or derivatives platforms.
4. Application Layer: The user-facing layer of wallets, dashboards, and aggregators that interact with protocols.
5. Aggregation Layer: Services that optimise use and accessibility by coordinating multiple protocols and applications.

Until now, the dominant DeFi use cases have centred on decentralised trading, collateralised lending, and synthetic derivatives. What Circle introduces with CPN is a new kind of financial protocol: one focused on institutional payments and on-chain money movement, deeply integrated with compliance and fiat connectivity. This is not DeFi as an alternative — it is DeFi as financial infrastructure.

Meanwhile, Mastercard is leading the charge on the consumer and merchant side. Through partnerships with Circle, Paxos, Nuvei, OKX, and MetaMask, Mastercard is enabling over 150 million merchants in its global network to accept stablecoins like USDC — regardless of the customer’s payment method. Mastercard’s new initiatives make it possible to pay with stablecoins through familiar interfaces, such as cards and point-of-sale devices, with backend settlement occurring on-chain.

In doing so, Mastercard is transforming the application layer of DeFi. While much of decentralised finance remains limited to Web3-native platforms, Mastercard is embedding stablecoin functionality into the existing retail payment experience. Consumers can now use wallets and cards interchangeably, and merchants can settle in crypto or fiat — all without needing to understand the blockchain beneath it. This shift opens DeFi’s usability to a far broader demographic and bridges the accessibility gap between crypto ecosystems and traditional commerce.

These capabilities are being deployed in phases, with Mastercard also introducing services like Crypto Credential for verified blockchain identity, and the Multi-Token Network (MTN), which supports real-time tokenised settlement across jurisdictions. The company’s aim is to create a 360-degree experience in which consumers can hold and spend stablecoins, and merchants can accept and settle them — all within a regulatory framework and existing payment infrastructure.

What distinguishes Circle’s and Mastercard’s strategies is their convergence around interoperability. Neither is attempting to replace the old system outright. Instead, they are building connective tissue between public blockchains and regulated financial networks — combining speed, transparency, and automation with compliance, trust, and scale.

As the CPN moves from concept to reality and Mastercard’s integrations expand, the promise of blockchain-based global payments is becoming more tangible. The future of cross-border money movement is unlikely to be fully decentralised or entirely centralised. It will be built on coordinated, compliant systems that integrate the best of both — and that future, while not yet here, is clearly coming into view.

This article was written by Liza Lobuteva of Digital & Analogue Partners. Visit dna.partners to learn more about our team and the services.

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Transforming Cross-Border Payments: Circle and Mastercard Take the Lead was originally published in Coinmonks on Medium, where people are continuing the conversation by highlighting and responding to this story.