FX execution quality: how to benchmark your provider's spread

Quoted spread vs executed spread

Three prices matter in any FX trade:

• Mid-market benchmark. The reference price for the currency pair at the time of the trade, typically sourced from Refinitiv, Bloomberg, or a comparable data vendor.
• Quoted price. The price the provider shows you before execution.
• Executed price. The price actually applied when the trade settles.

The difference between mid-market and executed is the all-in spread you paid. Providers typically market the difference between mid-market and quoted. Institutional measurement requires the executed figure.

TCA for FX, adapted for stablecoin-era flows

Transaction Cost Analysis (TCA) is a mature discipline in institutional equities and FX. Applied to stablecoin-routed cross-border FX, a usable framework tracks:

1. Spread vs mid-market at trade time. Measured in basis points (bps) of notional.
2. Slippage. Difference between quoted and executed. Positive slippage is a red flag unless rare.
3. Market impact. For large tickets, whether your own order moved the rate.
4. Opportunity cost. For delayed executions, what the rate moved between decision and fill.
5. All-in cost. Spread + slippage + any fees, aggregated.

For institutional flows, a proper TCA report includes these metrics aggregated by corridor, by provider, and by time bucket.

Realistic spreads by corridor (early 2026)

These are order-of-magnitude executed spread ranges for well-run institutional flows. Your own numbers should be calibrated against these.

Corridor	Traditional bank (bps)	Top FX brokers (bps)	Stablecoin-routed (bps)
USD-EUR (major, deep)	15-30	5-15	3-10
USD-BRL	80-200	40-120	15-40
USD-MXN	60-150	30-80	15-40
USD-JPY	20-50	10-25	5-15
USD-IDR (thin)	200-500	100-300	80-200
BRL-MXN (exotic)	300-800	200-500	100-300

Note that the stablecoin-routed column is narrower than traditional bank pricing but not zero, especially in thin corridors. Anyone quoting "near mid-market" in exotic pairs is either loss-leading or priced wrong.

How to structure the measurement

Step 1: Capture

For every FX trade, log:

• Timestamp at quote, timestamp at execution.
• Quoted rate, executed rate.
• Mid-market reference at both timestamps.
• Notional size in both base and quote currency.
• Corridor, counterparty, settlement venue (on-chain, off-chain).

Step 2: Benchmark

Pick a consistent mid-market source (Refinitiv is the institutional default). Always benchmark against the same source, and always at the same reference timestamp rule (e.g., midpoint of bid/ask at trade time).

Step 3: Aggregate

Produce monthly reports segmented by:

• Corridor (USD-BRL, USD-MXN, EUR-USD, etc.).
• Size bucket (under $100k, $100k-$1M, $1M-$10M, over $10M).
• Time of day / day of week (stablecoin flows often show favorable pricing outside traditional banking hours).
• Provider (when running competing desks).

Step 4: Act

TCA is only valuable if it drives routing decisions. Connect TCA output to live routing: if Provider A consistently executes USD-BRL tighter than Provider B by more than 8 bps, route USD-BRL flow to A.

Questions to ask any FX provider

• "What is your typical executed spread on USD-BRL at $1M size?" Acceptable answers are specific. Vague answers are a flag.
• "How do you source liquidity in thin corridors?" Bank-only, market-maker-only, or aggregated. Aggregated wins.
• "Do you offer firm quotes or indicative?" Firm is better but harder; indicative with small slippage bands is acceptable.
• "What is your uptime for live pricing?" Institutional flows need 24/7 live pricing, not business-hours only.
• "Can you provide TCA data monthly?" The good ones already do this.

Bottom line

FX execution quality is the single line item most responsible for cross-border cost, and the single line item most institutions do not rigorously measure. A simple TCA discipline, applied consistently, surfaces real savings and disciplines provider pricing. It is the highest ROI process improvement in most payments stacks.