Zelle’s Stablecoin Could Mark Its Entry into Cross-Border

The latest entity to consider minting its own stablecoin is Early Warning Services, the consortium of seven major U.S. banks that owns Zelle. The move could open up a new suite of services for Zelle, most prominently cross-border payments.

Zelle has grown by leaps and bounds since its introduction in 2017. It processed more than $1 trillion in payments volume last year and boasts more than 150 million users.

However, one area where it lags behind competitors like PayPal is the ability to send money across borders. Currently, Zelle users must have a U.S. bank account to transmit funds to one another.

A Spate of Stablecoins

Many financial entities have considered introducing stablecoins in recent months, particularly after the passage of the GENIUS Act, which created a pathway for even highly regulated financial institutions to offer a stablecoin for the first time.

Citigroup, JPMorgan Chase, and Bank of America have all been exploring the possibility of entering the stablecoin space.

PayPal launched its own stablecoin, and last year, unveiled a transfer platform capable of sending money across borders. Zelle is likely interested in competing with PayPal in this area.

“The biggest use case is cross-border payments,” said Joel Hugentobler, Cryptocurrency Analyst at Javelin Strategy & Research. “Zelle could also use the stablecoins for instant refunds and chargeback credits, but most of the other programmable use cases will take time to build out and get right.”

Bringing Down the Fees

One question to address is whether Zelle would charge for cross-border payments. While Zelle transactions are currently free for users, cross-border payments typically incur a fee between 0.5% and 2.0% when using traditional remittance methods.

Stablecoins have already reduced the cost of sending money internationally. For example, Solana charges only pennies for its cross-border services, regardless of remittance size.

Ethereum, the most expensive of the crypto-related cross-border services, still charges just a few dollars, though costs can increase when network congestion is high.

Given these low costs—and Zelle’s no-fee model, it’s possible the company could offer such payments for free.

“Zelle needs to be careful if it charges fees for cross-border payments and remittances,” Hugentobler said. “If the fee is too large, users will go a different route to send stablecoins for next to nothing.”

A spokesperson for Zelle told PaymentsJournal that it had no comment on the stablecoin reports.