WTO Official: Fragmented Rules, Not Tech, Hold Back Stablecoins

Stablecoins are not being held back by weak technology — they are being held back by a patchwork of conflicting rules. That was the blunt message from Juan Marchetti, director of the World Trade Organization’s trade in services and investment division, in a Monday speech in Geneva that introduced a new WTO study on stablecoins in world trade. According to Marchetti, regulatory fragmentation, not any technical shortcoming, is the primary barrier keeping stablecoins from scaling up as a tool for international payments and trade finance.

The claim lands at a moment when the numbers tell two very different stories at once. On one hand, stablecoins remain a tiny sliver of global payments, accounting for just 3% of total international payment volume. On the other, their cross-border payment volume has grown 35-fold between 2020 and mid-2024 — a trajectory that suggests genuine demand and technical readiness, even as adoption stays marginal in the bigger picture of world trade.

A Regulatory Map Still Full of Gaps

The WTO study draws on an October 2025 report from the Financial Stability Board, which surveyed 28 jurisdictions and found that only 11 of them — about 39% — had finalized stablecoin regulatory frameworks. That leaves a majority of surveyed jurisdictions operating without settled rules, forcing businesses and payment providers to navigate uncertainty market by market rather than relying on a coherent global standard.

This unevenness matters because trade finance and cross-border payments are inherently multi-jurisdictional. A stablecoin transaction moving value from one country to another can pass through, or touch, several regulatory regimes at once. When those regimes disagree — or when one side simply has no framework at all — the friction shows up as cost, delay, and legal uncertainty for the businesses trying to use the technology. Legislative efforts to build clearer rules are underway in multiple markets, including ongoing debates in the United States over frameworks like the Clarity Act, which illustrates how even large economies are still working out the legal architecture for digital assets.

The WTO report reportedly identifies five specific friction points that continue to weigh on trade finance: cost, speed, access, transparency, and foreign-exchange limitations. Notably, these are largely structural and regulatory in nature rather than technological — reinforcing Marchetti’s central point that the blockchain rails themselves are not the bottleneck.

What It Means for Trade and Developing Economies

If regulatory fragmentation is indeed the chief obstacle, the implications extend well beyond crypto-industry talking points. Developing economies — often the markets with the most to gain from cheaper, faster cross-border payments and trade settlement — are also frequently the ones with the least regulatory clarity. That combination could mean the populations who would benefit most from stablecoin-based remittances and trade finance are, paradoxically, the ones facing the highest uncertainty in accessing them.

This tension between opportunity and regulatory readiness is already playing out commercially. Major payment companies have moved ahead with stablecoin-linked products even as rules remain unsettled in many places. Western Union has partnered with Rain to launch a stablecoin wallet and card currently operating in 37 markets, with plans to expand to more than 60 markets by the end of the year. Mastercard, meanwhile, has developed its own cross-border stablecoin offering, Borderless, built on its Crypto Credential framework. Their willingness to scale despite the patchwork of rules described by the WTO suggests industry confidence in underlying demand — but it also underscores how much these companies are operating ahead of, rather than within, a settled global regulatory consensus.

Traditional financial institutions are also finding ways into the space through partnership models rather than building infrastructure themselves, a pattern visible in arrangements that let smaller banks offer stablecoin services without having to build them. That approach may prove a template for institutions wary of committing capital to a regulatory landscape that remains, in the WTO’s own framing, unfinished.

What Comes Next

The WTO’s findings point to a set of concrete developments worth watching in the months ahead. Among them:

• Whether more of the 28 jurisdictions tracked by the Financial Stability Board move from draft to finalized stablecoin frameworks, narrowing the current 39% completion rate.
• How legislative processes in major markets, including ongoing U.S. Senate debates, shape the international regulatory baseline that companies like Western Union and Mastercard are building products around.
• Whether payment providers’ expansion plans, such as the push toward 60-plus markets for the Western Union-Rain product, proceed on schedule or run into jurisdiction-specific regulatory friction.
• Whether trade-finance-specific concerns — cost, speed, access, transparency, and FX limitations — begin to narrow as more frameworks are finalized, or whether fragmentation continues to outpace technical and commercial readiness.

For now, the WTO’s message is a reframing rather than a resolution: the technology underpinning stablecoins appears capable of handling far more volume than it currently processes. The question the organization is putting to policymakers is whether regulatory coordination can catch up to that capability before the gap between technical readiness and legal clarity becomes a permanent feature of global trade finance.

Source: Cointelegraph

This content is for informational purposes only and does not constitute financial or investment advice.