Wise bypasses SWIFT by obtaining "direct connections" to a country's domestic banking system, a license rarely given to non-banks. This process is arduous, taking five years in the UK, creating a significant barrier to entry for competitors.

The company, originally TransferWise, was born when two Estonian founders devised a way to swap currencies between their UK and Estonian bank accounts to avoid exorbitant fees. This origin story is the DNA of the company's relentless focus on cheap, fast cross-border payments.

Despite the hype, stablecoins face significant friction in on/off-boarding from fiat currency, limiting their current utility. Wise itself has stated it would use stablecoin rails if they became cheaper and faster, positioning it to leverage the technology rather than be disrupted by it.

Wise holds a "counter-positioning" advantage over banks. For a bank to replicate Wise's low-cost model, it would have to abandon the lucrative, high-fee SWIFT system that underpins its current international transfer business. This reluctance to self-disrupt creates a protective barrier for Wise.

Wise reinvests profits from growing volume into infrastructure like direct connections. This lowers operating costs, enabling further fee reductions. The cheaper, faster service attracts more customers and volume, creating a self-reinforcing cycle that strengthens its market position.

Stablecoins uniquely combine speed (<1 second), low cost (<0.1 cent), and global reach. This positions them to dominate global payments, outperforming traditional systems like Swift (slow, costly) and credit cards (high fees), especially for B2B cross-border transactions where friction is highest.

Wise is not a bank and cannot lend, but it earns interest on customer deposits held in low-risk assets like short-term bonds. This provides a substantial, diversified revenue stream that grows with its customer base, reducing reliance on transaction fees alone.

Instead of disrupting the established SWIFT network, Japan's stablecoins are positioned to work alongside it. They offer a parallel system for faster, cheaper transactions, potentially reducing fees by up to 80%, while leveraging SWIFT's existing trust and compliance frameworks for broader adoption.

For global operators, the core complexity of international payments lies in the final "on-ramp and off-ramp" to local fiat currencies, not the underlying transfer rails. The real customer value comes from minimizing foreign exchange (FX) fees by keeping revenue and expenses within the same local currency.