The Real Challenge with Stablecoin Payments: Making Funds Usable

Stablecoins have changed the way businesses think about international transactions. With their promise of speed, low costs, and global accessibility, more companies are exploring their use for paying suppliers, receiving cross-border payments, or managing international operations.

However, true efficiency in global payments isn’t just about blockchain technology. The biggest challenge isn’t sending USDT or USDC from point A to point B—it’s ensuring those funds can be seamlessly converted and used in the real world.

In this article, we break down the key challenges of stablecoin payments and why off-chain infrastructure is just as critical as on-chain speed.

The Real Challenge: Converting Stablecoins into Usable Capital

Stablecoins are attractive because they remove intermediaries and lower transfer costs. But businesses that import, export, or pay international suppliers face a crucial issue: how to efficiently convert these digital assets into local currency without unnecessary losses.

For example:

• A supplier in Brazil receives payment in USDC but needs Brazilian reais to cover payroll and operating expenses.
• An importer in Mexico gets paid in USDT but still needs pesos to pay taxes and local suppliers.
• A fintech in Africa wants to leverage stablecoins for cross-border transactions, but its customers must be able to withdraw funds in local currency without friction.

Most economies still rely on traditional banking infrastructure, meaning conversion and access to local liquidity are essential pieces of any digital payments strategy.

What Many Stablecoin Payment Solutions Overlook

Stablecoins solve the problem of transferring value on blockchain, but they don’t eliminate the need for financial infrastructure off-chain.

Here are some key challenges that many solutions fail to address:

Currency Conversion and Liquidity Access

Receiving stablecoins is only the first step. For a business to actually use these funds, it must:

• Convert them into local currency without suffering significant FX losses.
• Access sufficient liquidity to cover operational expenses.
• Integrate with banks and local payment providers.

Solutions that rely solely on crypto exchanges often face liquidity shortages in certain regions, impacting both speed and cost efficiency.

Regulatory Compliance and Local Regulations

Many countries impose restrictions on cryptocurrency usage or have specific rules for converting digital assets into fiat currency. Businesses must ensure their payments are:

Compliant with local regulations.

Traceable to avoid tax and regulatory issues.

Integrated with established financial systems.

Ignoring these factors can lead to frozen accounts, unexpected audits, or additional compliance costs.

Integration with Banking and Traditional Payment Networks

Companies don’t just need to receive money—they also need to pay suppliers, employees, and operational costs. A stablecoin payment is ineffective if it cannot be smoothly integrated with local banking systems and payment networks.

The Future of Cross-Border Payments: Integrating Stablecoins with Financial Infrastructure

The future of global payments isn’t about choosing between blockchain and traditional financial systems—it’s about leveraging the best of both.

Companies looking to improve their international payment processes should prioritize solutions that:

• Combine the speed of stablecoins with an infrastructure that ensures access to local currency liquidity.
• Enable seamless currency conversion without hidden fees or volatility risks.
• Guarantee regulatory compliance to prevent operational issues in different jurisdictions.

Stablecoins have reshaped global payments, but their full potential can only be realized when they are integrated with solutions that address off-chain financial complexities.

How Conduit Can Help

Businesses operating across borders need more than just fast transactions—they need a solution that ensures payments can be efficiently converted into working capital without friction.

Conduit enables seamless international payments by combining stablecoins with access to local liquidity and regulatory compliance in the markets where we operate. Our platform allows businesses to pay suppliers and receive cross-border payments without the challenges of currency conversion or regulatory roadblocks.

If your company moves money internationally and needs a frictionless solution, learn how we can help.

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