--- title: "Stablecoin routing across chains, currencies, and bank accounts" description: "Discover more about how stablecoin routing picks the preferred transfer paths for speed and cost while respecting recipient compatibility." path: "/learn/stablecoin-routing/" label: "Payments" image: "/cards/learn-stablecoin-routing.webp" --- When there are several different ways to move stablecoins from A to B, stablecoin routing systems determine which pathway offers the most benefits. Stablecoin payment routing is all about choosing the ideal transfer path through the available infrastructure. It shares traits with transfer methods like conversion and fiat on- or off-ramping, but it also serves a distinct purpose. A successful routing system finds paths that meet each transfer's requirements while respecting the user's cost, speed, and compatibility needs. In this guide, we explain how stablecoin routing selects a path, go over what happens when a preferred route is unavailable, and offer advice about what to look for when building routing infrastructure. ## How stablecoin routing selects a path across chains and currencies When someone initiates a [stablecoin transfer](https://tempo.xyz/learn/what-are-stablecoins/), the payment routing system first identifies eligible paths. This involves analyzing the [supported stablecoins](https://tempo.xyz/learn/stablecoins-for-business/) and blockchain networks. Systems also look for payment providers and liquidity partners. Once they find potential routes, systems analyze the destination account to ensure the provider and network will work with the recipient's setup. After filtering out routes that don't meet these basic transfer requirements, it's time to compare trade-offs in features such as: - **Total transfer cost.** Routing systems account for fees at every stage of the payment's journey. Including a transaction fee, the total transfer cost adds together every applicable charge, such as conversion spreads and network-specific fees, to estimate the transfer's full price. - **Execution speed.** By analyzing average processing times across networks and intermediaries, routing systems can more accurately estimate how long transfers take to complete. - **Available liquidity.** Without enough funds on a route to support the requested amount, recipients are at a higher risk of delays or paying unfavorable spreads on their stablecoins. - **Settlement finality.** Each network and provider could have a different confirmation threshold. Routing systems need to evaluate these rules so that they know when funds are final and available for the recipient to use. - **Provider availability and restrictions.** Even if a path is technically compatible, there could still be provider-specific restrictions like limited operating hours or transaction limits that make it less desirable. - **Destination compatibility.** Recipients need to receive funds in their chosen format, with the appropriate wallet standards and supported currencies. Even if this isn't as cost-effective, there's no point in sending funds on a route that won't arrive at the final destination. ## How do fees and slippage affect stablecoin routing costs? A blockchain's average network fees aren't enough of a dataset to estimate the [cost of transferring stablecoins](https://tempo.xyz/learn/stablecoin-payments/). Routing systems tally up multiple stablecoin transaction fees in their analysis, so users have a more realistic expectation for their costs. These include: - **Network fees.** These are the fees that blockchains charge to process and confirm transactions. Every network has different rules, but [network fees](https://tempo.xyz/learn/stablecoin-transfer-fees/) tend to fluctuate in line with congestion. - **Provider charges.** Intermediaries and payment providers may charge fixed or percentage-based fees for processing a transaction. - **Conversion spreads.** A spread is the difference between the latest market exchange rate and the rate offered at the time of conversion. - **Slippage.** While similar to conversion, slippage measures the discrepancy between the expected versus actual conversion rate. The risk for this pricing inefficiency increases as average liquidity decreases. - **Destination-side charges.** These can include receiving fees for the recipient once a transaction reaches its destination or additional costs for services like withdrawals. Routes that tout industry-leading network fees aren't necessarily the cheapest. Systems have to consider all these charges to more accurately estimate a stablecoin settlement's true cost. It's not just about expected charges, either. The size of a transfer, available liquidity, and corridor restrictions all play a major role in the final figure. Small transfers may be fine in sub-optimal liquidity conditions, while large transfers could trigger major slippage with the same amount of liquidity. Once systems account for these influences, you'll have a clearer sense of routing economics. ## What happens when the preferred stablecoin route is unavailable? If it isn't possible to process payments on a preferred stablecoin route, a routing system will look for alternative eligible pathways to complete the transfer. This may be because it detected insufficient liquidity or heavy congestion on the original route. Opting for different intermediaries or liquidity providers may keep funds moving. On the downside, swapping a route or adding more steps between sender and recipient often comes with trade-offs in time or cost. Any fallback route must meet nonnegotiable transfer requirements and material terms. Otherwise, the routing system will need explicit authorization before proceeding. If a transfer fails mid-journey, recovery procedures will kick in. The system looks for what happened along the payment path to determine whether funds need to be recovered or redirected. Routing systems can safely use unique idempotency keys on failed operations to avoid creating a second transfer. Attaching these keys allows systems to check whether the original request was processed before trying the move again. For cases where there's no eligible way forward, the system may need to issue a delay, requote, or rejection. Routing should never force a transfer through an unsuitable path just because the preferred path isn't available. Preserving transfer requirements and ensuring that funds reach their intended destination always take precedence. ## What to evaluate in stablecoin routing infrastructure The best system isn't necessarily the one that offers the most potential routes. What matters is whether the routing infrastructure supports your average transfer requirements and liquidity needs across corridors. Comparing routing infrastructure against these practical considerations can give a clearer picture of a system's true value. ### Supported networks, currencies, banking destinations, and providers The infrastructure's coverage needs to match all the currencies and markets your business serves. Double-check that everything, including blockchains, stablecoins, and payment providers, links to your daily operations. ### Access to liquidity across relevant corridors Broad network coverage isn't enough for fast, affordable [cross-border transactions](https://tempo.xyz/learn/cross-border-payments/). Providers need sufficient available liquidity to handle average transaction sizes without the risk of wide spreads. ### Visibility into total costs Businesses need more information than just average network fees. For the best sense of routing economics, find routing systems that incorporate estimates for every cost along the payment path. ### Configurable routing rules Ask whether it's possible to set routing logic around business requirements like cost limits and preferred providers. Plus, establish how the system would find an alternative path if the preferred route wasn't available. ### Operational reliability and handling of unavailable routes When systems run into issues like provider outages or partial transfer failures, they need reliable recovery procedures to protect transfers. Mechanisms like transaction monitoring and safe retries keep transfers predictable while preventing duplications. ## Build stablecoin payment flows with Tempo Routes Tempo Routes connects supported stablecoins and blockchains to Tempo through one API, so businesses don't need to integrate each bridge or liquidity provider separately. With Tempo Routes, businesses can see the supported routes available to their organization in one integrated solution. Routes is in beta, and Tempo confirms access and the routes each business needs. Its application programming interface (API) returns the supported paths for moving stablecoins between Tempo and other networks, including conversions between supported stablecoins. You just need to review the available routes and quotes before initiating your transfer. For firms eyeing stablecoins for cross-border settlement, Tempo Routes offers a straightforward way to accept stablecoin deposits from supported networks. Delivery in local currency or to a bank account depends on a separate ramp or payout provider. Discover how simple [Tempo Routes API](https://tempo.xyz/routes/) makes building your stablecoin payment flow. ## FAQ ### When is stablecoin routing unnecessary for a transfer? It makes no sense to analyze routes when senders and recipients use the same stablecoin on a shared blockchain network. A direct transfer works just fine. You only need to compare alternative pathways when a transfer involves multiple currencies, networks, or liquidity sources. ### Does stablecoin routing require businesses to hold funds? Not necessarily. Some setups let businesses use routing infrastructure without taking custody of customer funds. However, there are instances where custodial arrangements are a necessity, such as when you hold a balance for users or when you want to use stablecoins but still settle in fiat currency. ### Are stablecoin routing quotes guaranteed until execution? Quote validity isn't a certainty. The accuracy of a transfer quote largely depends on the provider and selected route. Factors like fee fluctuations, exchange rates, and liquidity could also cause discrepancies between the generated quote time and the actual transfer execution. ### What factors determine the best route for a stablecoin transfer? After a routing system identifies all eligible paths, it weighs cost, speed, and liquidity to choose what it considers the best route. However, the cheapest and fastest path isn't always the optimal choice. To make sure the transfer finalizes without high fees or wait times, routing systems must consider the specifics of the transfer and destination requirements when evaluating viable paths. ### How does stablecoin routing work across blockchains and liquidity sources? For cross-chain transfers, routing systems must identify paths with bridges or partners between two chains and enough liquidity. Once it finds a viable route, it will compare factors like speed, fees, and destination compatibility to choose the best option. --- [Talk to the Tempo team](/contact/) about moving stablecoins between Tempo and other supported networks with Tempo Routes.