Payments headlines are full of news about stablecoins, but many financial professionals remain unsure how to approach this new payment type — whether to adopt it, experiment with it, or simply watch and wait. The market for stablecoins is developing rapidly, and its trajectory is hard to predict. For now, most treasury teams are taking a cautious approach — staying informed, evaluating use cases, and discussing stablecoins and digital assets with bank partners and select vendors.

But stablecoins could soon become an everyday payment type that will complement, rather than replace, current processes. They have the potential to add quantifiable advantages to treasury operations, so adoption is worth exploring. Here are some steps to take before diving in.

Questions to Consider

Many businesses lack the internal knowledge needed to effectively deploy stablecoins; according to a PNC study, only 17% of treasury and finance leaders feel ready to adopt them today. A crucial first step is educating all stakeholders on stablecoins’ value proposition and how they work.

Once everyone is sufficiently informed, teams can consider the following questions:

• What problem are we trying to solve?
• Do we intend to hold stablecoins as an asset or to use them only as a payment rail?
• Is this option better than our current process?
• Who issues the stablecoin?
• How easy is redemption?
• What controls do we need?
• How will stablecoins show up in accounting and reporting?

Teams can then develop policies, permissions and processes for approving, tracking and reconciling transactions. Finance, legal, compliance and accounting teams should all be involved in constructing this framework.

Choosing a Stablecoin

Choosing the stablecoin is less about selecting the “best” token and more about evaluating the underlying ecosystem, infrastructure and risk profile. Treasury and payments teams should assess factors such as:

• The quality and liquidity of reserves
• Issuers and custodians’ trustworthiness
• Regulatory compliance
• The related blockchain network
• Interoperability
• Transaction speed
• Scalability
• Integration with treasury systems and ERPs
• The availability of reliable on- and off-ramps into local currencies

Roadmap to a Pilot

The best approach to adopting or experimenting with stablecoins is to start small. Companies can pilot a low-risk, high-value use case using the following roadmap:

• Step 1: Define the use case and business case.
• Step 2: Convene internal stakeholders.
• Step 3: Conduct legal, accounting, tax and compliance review.
• Step 4: Select platform, issuer and custody model.
• Step 5: Build controls, approval workflows and reconciliation processes.
• Step 6: Run a pilot.
• Step 7: Review the results and decide whether to scale.

Success can be measured through improvements in speed, cost, error rates and effectiveness of controls. Governance should be emphasized at each step.

Challenges in Stablecoin Adoption

Of course, the adoption of stablecoins does not come without challenges. Integrating them with enterprise resource planning (ERP) systems and treasury workstations requires API connectivity to wallets and exchanges, which may seem daunting. Banks and technology providers can help to simplify the process, however.

Liquidity shortages can also be a barrier. When liquidity is limited, businesses can initially focus on closed environments where less is required. For example, they could work with a trusted partner on a specific use case that does not involve moving across multiple blockchains or conversion to seldom-used currencies.

And finally, uncertainty about compliance and regulations may discourage companies from experimenting with stablecoins. But businesses can start small by running modest pilots in jurisdictions where the rules are clear.

In any pilot, legal and accounting teams should be involved from the beginning, and companies should only work with trusted, regulated partners.

Stay Informed

Stablecoins may not be appropriate for every organization today, and widespread adoption will take time. But as infrastructure matures and regulatory frameworks become clearer, stablecoins are likely to become another tool in the treasury toolkit — particularly for organizations seeking greater speed, transparency and flexibility in moving money. The question is becoming less whether treasury teams should learn about stablecoins and more whether they can afford not to.

The AFP Payments Guide, Stablecoins and Treasury: What Financial Leaders Need to Know, addresses these points in more detail. The guide defines stablecoins, explains how they work, includes helpful advice from practitioners, and describes use cases relevant to financial professionals who are weighing adding stablecoins to their treasury toolbox.