Cross-Border Payments & Treasury

The Capital Efficiency Problem: Why Global Finance Is Moving Onchain

One of the highest hidden costs in global finance is not moving money, but keeping money parked in the right place before it needs to move.

Before a company can pay suppliers in Asia, fund contractors in Latin America, or take orders in Europe, institutions manage treasury operations across multiple jurisdictions, and capital often needs to be pre-positioned in local accounts because traditional payment infrastructure cannot move funds globally in real time. This process, known as pre-funding, creates one of the largest inefficiencies in cross-border finance. Capital sits idle across correspondent banking networks, earning no return while generating operational complexity and foreign-exchange exposure for the institutions that manage it.

The global cross-border payments market processed more than $208 trillion in volume in 2025, yet industry estimates put the capital sitting idle in pre-funded correspondent accounts at upward of $1 trillion globally: money earning little or no return while it waits to facilitate transactions that haven't happened yet. Across institutional FX, cross-border stablecoin payments, settlement, and treasury management, financial institutions and payment providers are using Avalanche to address that structural inefficiency directly.

Why the Current Infrastructure Compounds the Problem

Cross-border payments still rely on intermediary banking infrastructure built around delayed settlement and fragmented liquidity. According to World Bank data, the average cost to send a $200 cross-border remittance remained above 6% in 2025, while international bank transfer fees continue to materially exceed those of digital-native payment operators.

For treasury teams, transaction fees are only part of the equation. Liquidity held in pre-funded correspondent accounts generates no return, introduces FX exposure across jurisdictions, and requires ongoing operational management to maintain. Settlement delays add another layer of friction: once funds move, they can take days to reach the destination institution, and the industry reportedly spends more than $1.6 billion annually simply investigating delayed payments that have already been sent.

The pre-funding requirement is the core structural constraint. It forces payment operators and institutions to distribute capital across dozens of jurisdictions as a permanent operating condition, tying up working capital that could otherwise be deployed productively.

How Settlement Infrastructure Changes the Capital Model

Avalanche provides the settlement platform infrastructure that allows this model to change. Sub-second transaction finality, predictable transaction costs, and continuous settlement availability mean that liquidity can move precisely when and where it is needed rather than being pre-positioned across fragmented banking networks. For institutions deciding where to build, that infrastructure now comes with a growing ecosystem of banks, asset managers, and payment operators already operating on it.

Nonco,  the first institutional FX venue on Avalanche, addresses a gap that has limited stablecoin adoption in institutional FX markets. Most onchain currency conversion relies on automated market maker models that price at wider spreads than institutional counterparties typically accept. Nonco connects more than 350 institutional liquidity providers directly to stablecoin markets through a request-for-quote system, delivering pricing and spreads consistent with traditional FX markets. Settlement occurs atomically onchain, meaning both legs of a transaction finalize simultaneously, eliminating the risk of one side settling without the other.

Axiym operates at the infrastructure layer, directly addressing the pre-funding problem for licensed payment operators and corporate treasury teams. Rather than requiring institutions to allocate capital across jurisdictions in advance, Axiym's payment infrastructure dynamically coordinates liquidity routing, treasury management, compliance, and settlement execution. Institutions continue to operate through familiar banking systems and payment APIs without needing to manage wallets, custody digital assets, or restructure their regulatory frameworks. 

Beneath that surface, payment flows follow a fiat-to-stablecoin-to-fiat model: funds enter via existing banking infrastructure, settlement liquidity is created through embedded stablecoin processes, payment obligations settle on Avalanche, and local currency is delivered via corridor-based payout partners. 

FX liquidity is sourced directly from payment service providers and money service businesses operating within destination corridors, reducing reliance on correspondent banking chains and the spreads associated with layered intermediaries.

For institutions, the experience resembles a treasury and payment infrastructure upgrade rather than a blockchain integration project. Compliance controls, including KYB onboarding, transaction monitoring, sanctions screening, and Travel Rule enforcement, are built into the transaction layer itself. Payment activity stays within the regulatory frameworks institutions already maintain, operating as a controlled financial environment rather than an open settlement network.

As institutions integrate, two reinforcing dynamics take hold. Payment APIs, treasury coordination, and payout connectivity become embedded within institutional operational processes, making the network progressively more difficult to displace. Simultaneously, liquidity accumulates within active payment corridors as flow volume increases, improving FX routing and execution efficiency over time. The result is recurring onchain settlement activity tied to real economic transactions rather than speculative market behavior, and a network that becomes more valuable to participants as adoption grows.

Institutional Adoption is Accelerating

These infrastructure developments are moving well beyond pilots. SMBC, Japan's second-largest bank with approximately $1.7 trillion in assets, signed a memorandum of understanding with Ava Labs, Fireblocks, and TIS to explore stablecoin infrastructure for wholesale institutional payments.  TIS, which processes roughly $2 trillion annually and handles approximately half of Japan's credit card transactions, launched a platform on Avalanche to issue and settle stablecoins and tokenized deposits. 

At the national level, SMBC, MUFG, and Mizuho are jointly exploring a yen-pegged stablecoin on Avalanche, an initiative that would represent coordinated national financial infrastructure built on a single blockchain.

In Southeast Asia, KBank and StraitsX are developing regional payment infrastructure through Project BLOOM to improve settlement efficiency across corridors where correspondent banking is particularly costly and slow.

Treasury Optimization as the Other Half of the Problem

Capital efficiency does not end at the payment layer. For treasury teams managing global operations, the same dynamics that create inefficiency in cross-border settlement also affect how reserves are held and how capital moves within the enterprise — between subsidiaries, across currencies, and ahead of payment cycles. Capital parked in low-yield accounts to meet future payment obligations represents a second, quieter form of the pre-funding problem.

AeraTech addresses the intracompany dimension of that problem. Multinationals typically settle intercompany obligations through external banking infrastructure, incurring unnecessary fees, FX costs, and settlement delays on transactions that never need to leave the corporate group. AeraTech's treasury platform — built on Avalanche and backed by an Avalanche Foundation infraBUIDL grant — gives finance teams real-time visibility across subsidiaries, automates netting of intercompany cash movements, and executes internal settlements instantly through policy-based controls. Capital that would otherwise sit idle across jurisdictions, waiting for slow manual processes, moves when and where the business needs it, without routing through external banks.

Avalanche's tokenized asset ecosystem provides the infrastructure for institutions to keep treasury capital productive. OpenTrade offers stablecoin yield vaults backed by tokenized US Treasuries, European bonds, and money market instruments, managing over $200 million in TVL with Avalanche accounting for more than 97% of usage.

Franklin Templeton's BENJI, VanEck's VBILL, and WisdomTree's tokenized money market products provide regulated, yield-bearing options for onchain capital management, giving treasury teams access to instruments that can earn return while remaining accessible for settlement. Avalanche's total tokenized asset TVL currently sits around $1 billion, reflecting growing institutional allocation to these instruments.

Request Finance extends Avalanche's role further into treasury operations, providing invoicing, payables, and reconciliation capabilities that help businesses manage financial workflows across both crypto-native and traditional counterparties.

What Changes When Capital is No Longer Idle

The infrastructure for institutional cross-border payments and treasury management is already operating in production. Capital that previously sat idle in pre-funded accounts across dozens of jurisdictions can now move when and where it is needed. Treasury reserves can remain productive between settlement cycles. FX transactions can settle in real time rather than through the fragmented, multi-day processes of correspondent banking.

For institutions evaluating cross-border stablecoin payments, onchain treasury management, or next-generation settlement infrastructure, Avalanche provides a growing ecosystem of partners already operating at institutional scale.