The Stablecoin Sandwich: Solving for Cross-Border Payments

Moving money globally is hard, and stablecoin payments are emerging as a better alternative. Traditional banking is slow, costly, and full of friction, while stablecoins offer a faster, more efficient way to send and receive funds. But to make them truly seamless, businesses and developers need the right infrastructure for both fiat and crypto.

That’s where the Stablecoin Sandwich comes in: a simple way to frame the different approaches businesses use to manage stablecoin payments. With advances in stablecoin regulation, this framework is becoming increasingly relevant for developers building global payment systems.

At its core, the Stablecoin Sandwich comes in two key forms:

• Full Stablecoin Sandwich: A fully automated flow where fiat is converted to stablecoins and ultimately off-ramped back into fiat.
• Half Stablecoin Sandwich: A more flexible approach where funds remain in stablecoins, giving users control over how and when they spend, off-ramp, or utilize funds onchain.

Each model serves a different need, whether for vendor payouts, payroll, or global remittances. We cover both in detail below.

What is the Stablecoin Sandwich? Full vs. Half

Full Stablecoin Sandwich Flow (Fully Automated)

In short, the full stablecoin sandwich enables fiat → stablecoins → fiat.?

Here’s the recipe that brings it together:

Step 1: User or business onboards and sends fiat

Step 2: Fiat converts to stablecoin via a Liquidity Provider (LP)

Step 3: Stablecoin transfers to a passthrough onchain address or “virtual account” with instructions

Step 4: Onchain wallets handle funds securely

Step 5: Funds automatically route to the recipient’s bank account

The Full Sandwich flow automates fiat-to-stablecoin conversion, ensuring seamless money movement with no manual steps. By embedding compliance measures such as adhering to Travel Rule requirements in EMEA and AML/Sanctions, businesses streamline transactions while ensuring regulatory alignment.

Each step of this process brings several underlying steps, each with important considerations:?

1. On-ramping process, including fraud prevention measures such as KYC, KYB (on the spot or via reliance agreements), and AML compliance
2. Sourcing USDC, USDT or other stables from common liquidity providers: Circle (US), ZeroHash, Bridge (which uses Circle) Exchanges, or Market Makers
3. Collecting and passing important information such as FBO (for benefit of) info + routing and counterparty information that gets shipped to an off-ramp provider or bank
4. Onchain wallet handling including security, custody, delegated access and operations
5. Off-ramping rail selection determining the fastest and appropriate real-time-rail for settlement

Half Stablecoin Sandwich Flow

Now let’s dig into the Half Stablecoin Sandwich. Whether for payroll, vendor payouts, or cross-border payments, this model offers flexibility by allowing recipients to choose how they manage their funds.?

In short, the half stablecoin sandwich enables fiat → stablecoins, where funds stay in a non-custodial embedded wallets and an end-user has several options to choose from.

Here’s how the half stablecoin sandwich flow works::

Step 1: Company sends fiat

Step 2: Fiat converts to stablecoin and lands in a non-custodial embedded wallet

Step 3: Users decides (or delegates) how to use their funds:

• Issue a debit card for spending of stablecoins
• Offramp funds to a local bank when they choose
• Send funds to an external wallet
• Keep funds onchain to earn yield

Within this flow, it is important to note that:

• Fund routing is not automatic. Users and businesses therefore get to have more control and more opportunity.
• The FBO and banking Instructions are still there but its executed on an as-needed basis to a bank if needed
• FX options aren’t required as currency conversion fees can apply when off-ramping to fiat

The Role of Wallets in the Stablecoin Sandwich

A secure and flexible wallet infrastructure is essential for both Full and Half Stablecoin Sandwich flows. Dynamic provides a powerful solution, enabling developers with:?

• Full control over where funds land and who has delegated access: Secure TSS-MPC embedded wallets let developers customize how and where funds are stored, allowing for delegation or non-delegated flows
• Top up automations and transaction simulation: Ensure that funds actually land where they are supposed to
• The ability to send funds to any wallet or off-ramp: Dynamic’s multi-chain wallet adapter lets users or developers connect to 500+ external wallets. Developers can programmatically route to most onchain wallets for funding or off-ramping
• Send funds to exchanges: Exchange integrations allow users to connect directly to multiple exchanges
• Data collection anywhere in the flow: Authentication and metadata collection ensure recipient information is handled and passed appropriately
• Embedded finance: Extensible integration services let you add yield opportunities and other financial features as needed

For companies building global stablecoin solutions, selecting the right wallet infrastructure is key. Whether you’re designing a fully automated flow or enabling user flexibility, having the right wallet and liquidity tools makes all the difference.

Interested in integrating the Stablecoin Sandwich? Book a time to chat.