Overview of Stablecoins
Stablecoins are digital tokens designed to maintain a stable value by being backed by assets such as U.S. dollars or government bonds.
This summer, the GENIUS Act became law and requires stablecoin issuers to be licensed, audited, and backed by safe assets. Regulations will roll out over the next 12 months, with full implementation no later than January 2027.
Under the GENIUS Act, stablecoins are not FDIC-insured, and issuers are prohibited from marketing stablecoins as being insured by the FDIC. Although stablecoins are not covered by FDIC insurance, the GENIUS Act requires issuers to maintain reserves in safe, highly liquid assets, such as U.S. dollars or government bonds, and to undergo regular audits and licensing, providing a measure of protection and transparency for businesses and consumers.
Unlike Bitcoin and other cryptocurrencies, which are subject to significant price volatility, stablecoins are intended for everyday transactions. These include payments, remittances, and settlements, providing predictability and efficiency for businesses.
Obtaining and Using Stablecoins
Today, stablecoins are available for purchase from regulated issuers, like Circle's USDC, or on cryptocurrency exchanges like Coinbase that comply with applicable anti-money laundering (AML) and know-your-customer (KYC) requirements. Individuals and businesses can accept stablecoins as payment from customers using digital wallets and then can deposit them into their bank account just like any other check or cash deposit.
For Small and medium-sized businesses (SMBs), stablecoins can facilitate instant payments, real-time balance tracking, and efficient cross-border transactions. Such uses include accepting payments from international customers, paying vendors, and streamlining payroll. However, businesses must ensure that all digital asset activities are conducted in compliance with current laws and regulations.
Cost and Speed Considerations
Some of the strongest benefits of stablecoins are reduced costs and speed. Traditional banking payments, especially cross-border, can take days to clear and often involve high fees. Wire transfers, for instance, can cost $25–$50 per transaction. Credit card processors typically take 2%–3% of each transaction, and vendors receive funds days after a sale. Stablecoin transactions can settle within minutes and often incur lower fees than traditional payment methods, such as wire transfers or credit card processing. This can improve cash flow and reduce reliance on intermediaries, which is particularly beneficial for businesses with tight margins or frequent cross-border transactions.
Customer Perspectives
Customers may appreciate the speed and cost savings of stablecoin payments, especially for international transactions. Consider a real-world example: an online retailer selling products to customers in Latin America. Traditionally, payments might be slowed by currency conversion, bank transfer fees, and delays. By using stablecoins, the customer can pay instantly in a dollar-backed token, and the business can receive immediate settlement without losing time or money. As a result, both sides benefit.
Risk Management and Regulatory Compliance and the GENIUS Act
Like any financial tool, stablecoins come with risks. Businesses may worry about fraud, technical issues, or whether funds are truly safe. Without oversight, there was concern that issuers might not actually hold the dollars they claimed.
This is where the GENIUS Act comes in. For SMBs, this new law means greater trust that stablecoins are secure, properly managed, and recognized by regulators. Still, businesses should consult legal and accounting advisors to ensure any adoption complies with financial reporting and tax obligations.
The CLARITY Act and the Future of Tokenization
Stablecoins are only the beginning. The pending CLARITY Act aims to create a broader framework for digital assets beyond stablecoins. If enacted, it will clearly define which agencies regulate which types of tokens and provide pathways for other assets—such as real estate, commodities, or even equity interests—to be represented digitally in a compliant way.
This process, known as tokenization, uses blockchain technology to represent real-world assets digitally. Stablecoins are the first widely adopted example of tokenization; the U.S. dollar represented in token form. The CLARITY Act could open the door to a larger digital economy.
Planning for Adoption
Stablecoins are poised to move from concept to practical reality for SMBs. With the GENIUS Act now law, the rulemaking process is underway. A public comment period is already open through October 2025, and final rules will be implemented by January 2027.
What does this mean for SMBs? It provides a clear window of time to plan. Over the next year, business owners should:
Talk to payment processors: Ask whether they plan to support stablecoin settlement once regulations take effect.
Engage your bank: Inquire whether your financial institution is preparing to offer stablecoin rails or custody services.
Explore vendors and wallets: Identify where stablecoin payments could reduce costs or speed operations.
Start small: Even before full implementation, consider pilot programs with trusted vendors.
By beginning conversations now, SMBs can position themselves to adopt stablecoins as soon as the market becomes regulated and reliable. For businesses looking to improve speed, lower costs, and gain a competitive edge, this is the time to prepare.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
