Global: Coastal Bank partners Tempo to modernise cross-border payments with stablecoin settlement

Coastal Bank is collaborating with Tempo to develop a next-generation cross-border payment infrastructure that combines traditional banking processes with stablecoin-based settlement.

The initiative is designed to enable fintech clients to move funds across borders more efficiently by retaining existing compliance frameworks—such as KYC/AML checks and interbank messaging—while replacing the underlying settlement layer with blockchain-powered transactions.

Under the model, a customer initiates a payment through a partner bank, which conducts standard compliance screening before sending payment instructions to Coastal Bank. The sending institution then converts local currency into USD-denominated stablecoins via an issuer and transfers them through the Tempo blockchain to Coastal’s wallet.

Upon receipt, Coastal redeems the stablecoins, confirms the transaction, and credits the beneficiary’s account in US dollars.

By shifting settlement onto Tempo’s blockchain, the process eliminates reliance on multiple correspondent banks, enabling near-instant fund transfers at significantly lower costs compared to traditional cross-border payment systems.

Despite the technological shift, the compliance and regulatory layers remain unchanged—ensuring continuity in oversight while enhancing speed and efficiency at the settlement level.

According to Chief Product Officer Ryan Hall, the strategy is not to displace legacy infrastructure but to integrate it with emerging technologies. The bank is building a hybrid system that allows stablecoin and traditional payment rails to operate in parallel, accessible through a unified interface.

This approach positions Coastal Bank to offer fintech partners a seamless bridge between conventional banking systems and digital currency innovation, as the financial industry continues to explore more scalable and cost-effective cross-border payment solutions.