What are stablecoins and how can you use them in your business?

October 2025 by Koywe Team

If you're figuring out how to take your local business into the global market, this article is for you. We'll walk through how stablecoins could be a key piece of that move, and also a solution if you're already operating internationally and finding it hard to send or receive payments across countries.

What are they?

Before we get into stable cryptocurrencies, we need to cover what a cryptocurrency is. It's a digital asset that isn't controlled or backed by any bank, so exchanges don't need intermediaries, which makes it a type of currency you can transact with quickly and easily.

Now, knowing that stablecoins are a type of cryptocurrency, their main job is to hold a constant, stable price. That's why, in many cases, their economic value is tied to a "real world" currency, like the US dollar or the euro.

How do stablecoins work?

They were designed to reduce the price instability seen in other cryptocurrencies. By tying their value to physical assets or goods, they offer a more stable exchange and become a more consistent medium of exchange. That's why they're increasingly used in financial transactions.

Types of stablecoins

There are several types of stable cryptocurrencies, which can be classified by their structure, backing, and issuance. Here are the most popular ones:

1. Fiat backed

These tie their value to currencies issued by a government, like the US dollar or the euro. The ratio is 1:1, meaning every stablecoin issued is backed by an equivalent amount of fiat currency. In short: 1 stablecoin equals 1 US dollar.

2. Commodity backed

These stablecoins get their value from physical assets that can be traded, such as gold, real estate, or oil.

3. Algorithmic stablecoins

Unlike the ones above, these aren't based on real assets. They use algorithms to manage supply and demand.

Who issues them?

The main issuers of stable cryptocurrencies are Circle and Tether. There are many others, but let's focus on these two.

• USDC, Circle

This stablecoin is backed 1:1 by the US dollar. Companies handling B2B and cross-border payments have adopted it for its stronger auditing and transparency.

• USDT, Tether

This is the most widely used stablecoin on the market, also backed by the US dollar. It offers low fees and speed, which makes it a great fit for companies running payment gateways.

Why use stablecoins for your business?

For companies looking to enter new markets

If you think your company is ready to expand across Latin America, but the idea feels intimidating, stablecoins can be the tool that gets you there safely and quickly.

New customers

Reaching other countries grows your customer base and your revenue, but it also means offering customers the chance to pay in their local currency, as long as an equivalent stablecoin exists.

New suppliers

You can also partner with suppliers in other countries, since you'll be able to pay them with far fewer roadblocks than traditional banks require.

Easier international payments and collections

Stable cryptocurrencies let you send and receive payments without relying on local banks, which speeds up the whole money transfer process.

For companies that already operate internationally

If your organization already operates in several countries, you know firsthand how complicated traditional payment methods can be. Here are a few reasons your B2B transactions would benefit.

Faster cross-border payments

With stable cryptocurrencies, you avoid payments that take days to arrive depending on the country you're in. Money moves faster.

Immediate liquidity

Funds become available in a short amount of time, giving you immediate liquidity to run other operations.

Lower exchange rate risk

If you already use a specific currency to pay or collect, say, US dollars, using stablecoins tied to that currency helps you avoid exchange rate volatility during those transactions.

In conclusion

Stable cryptocurrencies can be a solid payment method for cross-border transactions. The ones tied to a fiat currency in particular give companies a faster way to pay customers and suppliers than traditional methods allow.

So if your business is looking to expand or improve its international operations, it's worth considering stablecoins as part of your payment process.