5/24/25 There’s a deep irony at the heart of crypto’s [newest killer app](https://marginalrevolution.com/marginalrevolution/2025/03/stripes-annual-letter.html#:~:text=Crypto%20has%20found%20product%20market%20fit%20with%20stablecoins%2C%20%E2%80%9Croom%20temperature%20superconductors%20for%20financial%20services%E2%80%9D.). Every advantage that stablecoin has over SWIFT — the standard for cross-border wires — comes from its *centralization* of what was a decentralized/distributed system: *correspondent banking*. The way SWIFT [works](https://wise.com/us/blog/what-is-a-correspondent-bank), roughly, is that you originate payment from one bank, and the money passes through a network of correspondent banks across the world, until it reaches its destination bank. Sort of like a series of connecting flights. SWIFT is the messaging system to facilitate the money movement, and “correspondent banking” is the mechanism. What sucks about SWIFT? - It’s slow. “Up to 5 working days” comes from the time required to settle between each correspondent bank in the route. - Your recipient receives less than you sent, by a variable amount. Why? Every hop lets a correspondent bank eat a variable amount in fees from your principal. - You need to satisfy every bank in the chain on compliance, for your money to land. Stablecoin “solves” all of these problems by introducing a central point of intermediation; a kind of intermediary that would otherwise be incredibly difficult to get alignment and consistency on, across borders, short of global government. It reduces everything to a [book transfer](https://www.investopedia.com/terms/b/book-transfer.asp), in a new, central ledger – which is how you get instant, predictable, and simple payments. This is approximately how national governments, fintechs (eg. Venmo), and domestic clearinghouses operate *their* real-time, “account-to-account” (A2A) payment systems. SWIFT is a pain, relative to these systems, and now stablecoin - *specifically because* it's decentralized and distributed relative to them. For all the decentralization gospel in crypto; its biggest win emerges from its ability to ***centralize, what is inertially decentralized*** (eg. cross-border payments). You couldn’t centralize the world’s money movement onto a single ledger — enabling true global RTP — until crypto. You couldn’t start a global central bank, until Bitcoin. Crypto was *always* the great centralizer. #### Why crypto? Law and its enforcement back the status quo versions of this sort of thing, letting serious counterparties transact with each other safely and predictably. The rail itself is an abstraction over risk-minimizing rules and regulation. Law implies jurisdiction; and “jurisdiction” splinters and decentralizes as you scale past national boundaries. For a natively$^1$ global payment rail (eg.) - you need a jurisdiction that holds, stably, beyond those national boundaries — in the face of everyone's healthy resistance to anything that resembles “global government.” Crypto is a ledger and virtual machine that attempts this. It is an engineering solution to delivering maximum transparency/audibility, deterministic execution (ie. predictable rule of law), and overall diffuses as much control as possible. It’s especially *conspicuous* about this sort of risk-minimization; protocols form their core identity around consensus, security, execution. This conspicuous-ness is a critical feature, beyond ideological objective: it is conspicuous, so that it may overcome the inevitable resistance to such consolidation of power, and earn your trust. The elevated counterparty risk, regulatory & diplomatic risk, and mass social consent inherent to (eg.) a “global central bank” would strangle such a thing in its cradle (or preclude its conception). Crypto, not only in its mechanisms, but also in its narrative surrounding them, is a means of inhibiting that resistance. You could call it regulatory arbitrage; but regulatory arbitrage is just as capable, if not even more, of introducing a new normal. My takeaway: If you want to build in crypto, you should think of absurdly-ambitious power-grabs that the “techno-oligarchs” (eg. Zuck) would not even be *allowed* to attempt — and attempt them yourself, as public good. You should identify problems that would be solved by ***more centralization***, but remain unsolved due to the inherent untrustworthiness of any “center” that would try. Stablecoin is this sort of thing. Crypto, ideally, forces a baseline of structural nobility onto your attempt — credibly, or at least conspicuously, letting you prove your “public good” *as* *a public good* — and produces the orders-of-magnitude-greater social consent and trust required for you to succeed in the yet-impossible. Decentralizing what is already well-centralized — despite being the goal of most of the crypto *community* — is the exact *inverse* of useful in this case. So I think the irony at the heart of its big win, recently, bears pointing out. [krrishd](https://twitter.com/krrishd) --- $^1$ By natively - I mean, without the onerous [liquidity](https://www.fnb.co.za/blog/investments/articles/EquityInsights-140324/?blog=investments&category=Latest&articleName=EquityInsights-140324#:~:text=To%20reduce%20the,to%2080%2B%20countries.) & licensure requirements, across every supported country, that a fintech is subject to, to do what eg. Wise does; and without the variability and inconsistency across the local rails that such a fintech is merely a corridor between. There's a reason SWIFT remains a critical payment rail, even in a world with Wise local transfers; "high-value" [payments](https://davegarry.com/what-are-high-and-low-value-payment-systems/#:~:text=High%20value%20payments%20are%20settled,generally%20at%20end%20of%20day.) need the money to actually move cross-border, to "settle", in a way that low-value ones can obfuscate behind local liquidity / deferred settlement.