Just-in-time FX is an approach to cross-border payments in which a payment company converts currency only when a specific payment requires it, at a live rate, instead of buying foreign currency in bulk beforehand and holding it in accounts abroad. Each customer transfer, or a small batch of them, triggers a matching FX spot transaction with a bank or liquidity provider, and the proceeds are delivered directly to the payout rail.
The aim is to reduce the money tied up in prefunding and to shorten the time a firm carries currency risk on balances it holds in a nostro account. It depends on round-the-clock pricing, instant settlement in the destination currency and automated dealing through an API. Where local settlement is slow or markets close overnight, firms combine it with just-in-time prefunding or a small standing float. Stablecoins are sometimes used as the bridge asset.