While the high volatility and overall uncertainty around most virtual currencies have left many corporate treasury professionals hesitant to jump on the crypto bandwagon, stablecoins have garnered a lot of interest over the past couple of years. Viewed as both a payment solution and a potential instrument on the balance sheet, treasury teams are seeing a lot of promise in these digital tools.

Pegged to a reference asset, usually a fiat currency, stablecoins are more secure and transparent than other digital currencies. According to Treasury & Risk, the market for stablecoins is poised to hit $3 trillion by 2028. Many banks and fintechs alike have launched their own versions.

Using Stablecoin for Faster Cross-Border Payments

From a typical treasury perspective, there needs to be a reason for the company to invest in the hottest new piece of technology, no matter how many headlines it dominates. In stablecoins, treasury teams might find a very good reason — a medium for completing fast, easy cross-border transactions.

As an instant/real-time cross-border payments environment inches closer to reality, stablecoins are growing in interest. Stablecoins allow for near-immediate transactions that clear instantly with minimal fees. And because they are stored on a blockchain, payments can be enabled without an intermediary. This removes some of the friction of traditional cross-border payments, which typically require payments through multiple banks.

The GENIUS Act and Payment Stablecoins

In July, the Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act) was signed into law in the United States. The new law provides some regulatory oversight but could also bring compliance challenges for businesses using stablecoins.

The GENIUS Act allows permitted payment stablecoin issuers (PPSIs) to issue payment stablecoins — non-interest-bearing stablecoins that can be used for payment or settlement. The legislation mandates that payment stablecoins maintain one-to-one U.S.-dollar equivalent liquidity reserves. Only PPSIs can issue payment stablecoins in the U.S., according to the Act.

While the Act doesn’t classify payment stablecoins as cash equivalents, being backed by cash equivalent assets provides treasurers with a new instrument on their balance sheets.

“That's a change that could make a huge difference,” said Kammy Tsang, Senior Director, Head of Global Cash Management for PayPal, which works with Paxos on the PayPal USD stablecoin (PYUSD). “Just imagine if corporate treasurers had another instrument that provides speed, transparency and near instant on both domestic and cross-border transfer on your balance sheet that is classified as cash and a cash equivalent.”

Additionally, with the political climate in the U.S. becoming more digital asset friendly, Tsang, who is also member of AFP’s Treasury Advisory Group and is speaking on stablecoin at AFP 2025, is seeing more corporate interest in stablecoin. She likened the current situation to how other significant technological innovations caught on over time. “There is always apprehension in doing something for the first time, especially when it comes to your business processes,” she said. “But the infrastructure has started to take shape. It’s similar to the first electric-powered light bulb and the first iPhone debut moment.”

Stablecoin Use Cases

Stablecoins may be a better fit for some cross-border transactions than others. Intercompany transactions, in particular, are a good use case, Tsang said. She noted that corporate practitioners can run up against tax requirements when attempting to settle cash as they move from one entity to another, to another.

For example, a company that uses traditional payments may have several entities in Asia. The company’s subsidiary in Singapore may have a small window in which it can receive and settle cash from one of its other entities in Europe, the Middle East and Africa. From that point, there is another small window for the Singapore office to send it to the next entity and for that entity to settle it. “But with blockchain technology and stablecoin, you can do a lot more in less time, with much better control and without the reliance on detailed coordination with banks,” Tsang said.

Treasurers may also find trading partners who are ready and willing to use stablecoin over other payment methods due to their own unique situations. Tsang added that they may appeal to organizations in emerging markets that have highly volatile fiat currencies.

Treasury teams may even find stablecoins as useful tools to reduce trapped cash in certain regions. “If you have cash in Argentina, Nigeria and Egypt, you no longer need to hold those currencies. Instead, you can transact in a stablecoin,” Tsang said. “Then you can reduce a basket of trapped cash, which is meaningful.”

Searching for Stability

Stablecoins allow for near-immediate transactions that clear instantly with minimal fees. And since they’re stored on a blockchain, they remove much of the friction associated with cross-border payments. However, while they are considerably less risky than bitcoin and other cryptocurrencies, stablecoins still carry risks that may cause some treasury teams to be cautious. That said, organizations don’t necessarily want to be the last ones to the party to adopt technology that could seriously benefit them. Only time will tell how much U.S. treasury teams could adopt stablecoins for payments and as financial instruments, but with recent developments like the GENIUS Act, now might be the time to seriously consider them.

For more insights, be sure to download the AFP Payments Guide: Seismic Shifts Are Coming for Cross-Border Payments, underwritten by Wells Fargo.

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