Blockchain networks never sleep, but the traditional financial systems underpinning them still observe regular closing hours. TransFi founder and CEO Raj Kamal highlighted that the expansion of stablecoins pegged to local currencies - such as the euro, British pound, and Japanese yen - brings a new set of problems. The rollout of these new tokens poses a major challenge for foreign exchange liquidity, which is now expected to operate 24/7 without interruption.
Chained foreign exchange conversions are required across nearly every layer of cross-border transactions. More than 70% of fiat inflows into dollar-denominated stablecoins originate from non-USD currencies, according to data compiled by TransFi. This extended flow of funds requires FX execution at multiple points along the transaction chain. The primary bottleneck emerges when bridging the crypto realm with traditional banking market schedules.
Weekend Hedging Cost Risks
While on-chain token settlements operate seamlessly through holidays and weekends, conventional banking FX market liquidity dries up significantly outside standard business hours. This operational gap directly impacts businesses requiring instant cross-border transfers on Sundays or in the middle of the night.
Corporate transactions executed outside active trading hours force liquidity providers and market makers to carry substantially higher foreign exchange inventory risks. To protect against exchange rate volatility while primary markets are shut, market participants hike costs by widening bid-ask spreads. Kamal warned that 24/7 crypto payment rails risk losing their competitive edge if executing large weekend conversions becomes prohibitively expensive due to the added burden of hedging costs.
The Dollar Remains the Central Intermediary
Tight weekend liquidity stems from the fundamental structure of traditional foreign exchange markets. Global FX markets recorded an average daily turnover of $9.6 trillion in April 2025, a 28% increase from $7.5 trillion in 2022, according to data released by the Bank of International Settlements (BIS). Despite this massive turnover, liquidity remains fragmented and concentrated almost entirely within active conventional banking hours.
The absolute dominance of the US dollar also further restricts the room for maneuver in local stablecoin settlements. The US dollar accounts for 89% of all conventional FX transactions worldwide. A similar dominance is deeply entrenched in crypto, where 99.4% of fiat-backed stablecoins by total market capitalization remain pegged to the US dollar, according to the BIS 2026 Annual Economic Report.
Given the uneven availability of banking liquidity and the dominance of a single intermediary currency, trades between two local currency stablecoins will likely have to route through dollar token pairs to tap into the deepest liquidity pools. For corporations looking to move cash across borders instantly on a Sunday, the roadblock is not the speed of blockchain technology, but rather traditional foreign exchange schedules that remain unready for a 24/7 world. Reported by crypto.news.
Read also: What Is DeFi (Decentralized Finance)?
Disclaimer: This article is for informational and educational purposes only, not financial advice. Cryptocurrency assets are highly volatile and carry significant risk. Always do your own research (DYOR) and never invest more than you can afford to lose.
