What is corridor liquidity?
Definition
Corridor liquidity is the capacity to convert and settle money in one specific currency corridor, at the size you need, when you need it, without moving the price against yourself.
Liquidity shows up in three measurable ways: the spread you pay over mid-market, the size you can clear in one trade, and how long settlement takes when you do. A corridor can be liquid at 50 thousand USD and illiquid at 5 million USD. It can be liquid on Tuesday morning and dry on Friday after local cut-off. The corridor, not the currency, is the unit that has liquidity.
For payment companies the practical consequence is that your effective FX cost is set by corridor liquidity, not by the mid-market rate on a screen. Providers differ most exactly where liquidity is thinnest, in emerging market corridors. Stablecoin rails change the shape of the problem: liquidity concentrates in a few large stablecoin markets, and the local leg narrows to fiat conversion at each end. That structure is what lets Codex FX quote wholesale rates in corridors where bank liquidity is scarce.
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