Fintechs, Stablecoins, and Competition with Harvard's Wenxin Du

Cross-border retail payment systems are undergoing a significant shift as Fintech operators challenge the dominance of traditional commercial banks. While conventional wire transfers remain slow and costly, often charging around 300 basis points, Fintech platforms like Wise and Remitly reduce these fees to approximately 50 basis points by leveraging netting strategies and pre-funded liquidity. Although stablecoins are frequently promoted as a superior technological solution, they suffer from limited liquidity and high conversion frictions between fiat currencies, frequently exceeding the costs of established Fintech services. Furthermore, incumbent financial institutions often deploy regulatory hurdles to block competition, despite the clear consumer benefits of lower costs and increased speed provided by newer digital-first alternatives. Harvard Business School finance professor Wenxin Du highlights these systemic inefficiencies and the critical role of competition in modernizing global payment infrastructure.