As a regulated fintech, you know that moving money across borders comes with friction: SWIFT transfers can take days to settle, costs vary between corridors, and cut-off times introduce additional operational challenges. 

As blockchain infrastructure matures, stablecoins have emerged as an alternative for international value transfer. With 24/7/365 availability and near-instant settlement, regulated offerings like USDC and EURC offer a more efficient way to send money across borders. 

But adopting stablecoins introduces its own complexity. For one, many banks remain hesitant to work with digital assets, making it difficult to access compliant on- and off-ramping infrastructure. And when you do, converting between fiat and stablecoins often requires multiple providers: a bank to hold fiat balances, a blockchain issuer to mint or redeem stablecoins, and an additional wallet to manage on-chain transfers. 

In this guide, we’ll explain how exactly stablecoin payments work, where the opportunity for EMIs, payment institutions, and digital-asset platforms lies, and how ClearBank can help you access regulated stablecoin minting and redemption combined with bank-grade fiat rails through a single integration. 

We’ll cover: 

• How stablecoin payments work 
• Why are stablecoins a good choice for cross-border payments? 
• What makes stablecoins different from other digital assets and cryptocurrencies? 
• Why partner with ClearBank for stablecoin payments 

ClearBank is an API-first clearing bank that can support your move into stablecoin payments. ClearBank Europe is the first Dutch credit institution to operate as a Crypto Asset Service Provider (CASP) under the EU Markets in Crypto-Assets Regulation (MiCA). To learn more, reach out to us. 

A stablecoin is a type of digital asset that's pegged 1:1 to an asset such as the dollar or euro. Whereas cryptocurrencies that are used as a store of value (such as Bitcoin) can fluctuate in value based on market demand, stablecoins are designed to maintain a fixed value. 

Stablecoins exist on a shared blockchain that acts as a distributed digital ledger (rather than a bank’s central ledger). This means that every bank sees the same transaction state, and settlement occurs in a single system rather than through multiple intermediaries.  

Comprehensive stablecoin frameworks have emerged in the US (the Guiding and Establishing National Innovation for U.S. Stablecoins Act called the GENIUS Act) and the EU (Markets in Crypto-Assets (MiCA) regulation), while the UK is currently setting out its own regulatory approach. 

There are four types of stablecoin:  

1. Collateral-backed stablecoins: Cash or asset reserves serve as collateral to demonstrate that each coin is backed by its equivalent value. For instance, one stablecoin equals one dollar.  
2. Commodity-backed stablecoins: A subset of collateral-backed stablecoins, these are backed by a physical asset, such as gold.  
3. Crypto-backed stablecoins: Cryptocurrency reserves serve as collateral. This type of stablecoin can be more sensitive to crypto market swings. 
4. Algorithmic stablecoins: These use automated supply-and-demand mechanisms to maintain a fixed price. It carries a higher risk due to its reliance on market confidence and can be vulnerable to rapid instability, as seen in the Terra network's collapse in 2022. 

Read more about the four types of stablecoins: What are stablecoins and how do they work? 

Regulated businesses typically favour fiat-backed structures, such as collateral-backed stablecoins, because each token is pegged to a real-world asset, such as the dollar. If you want to redeem your asset, your issuer is obligated to provide it.  

Here’s how stablecoin payments based on fiat currencies work:  

1. A company sends funds (such as dollars, euros, or another fiat currency) to a stablecoin issuer. The issuer then ‘mints’ new stablecoins equal to the deposited amount. For example, depositing $1 million results in 1 million USD-backed stablecoins. This balance is recorded on a blockchain ledger, creating a single source of truth for all participants. 
2. The company receives the stablecoin into its digital wallet via the blockchain, which can take just minutes.  
3. The company can choose to hold the stablecoins or transfer them into another fiat currency, for example, for cross-border payments. If they choose to transfer them, the stablecoins are returned to the issuer, ‘burned,’ and the fiat amount is transferred instead. 

For instance, in a “stablecoin sandwich” model, a cross-border payment might begin with euros being debited from a payer’s bank account and converted (through ‘minting’) into a USD-pegged stablecoin such as USDC via a regulated on-ramp provider. The stablecoin is then transferred almost instantly over a public blockchain to a recipient in the US. Upon receipt, the stablecoin is redeemed (through ‘burning’) for US dollars and settled into the recipient’s bank account. 

In this model, the blockchain replaces part of the traditional banking chain, enabling near-real-time value transfer between jurisdictions. However, the traditional banking infrastructure remains in place at both ends of the transaction for on- and off-ramping. 

The two slices of bread are the traditional banking rails at either end of the transaction, while the blockchain forms the filling in between. 

This hybrid approach ensures you can still receive funds into your existing bank account in the correct currency while reducing the need for costly intermediaries.

Built on distributed ledger infrastructure, stablecoin payments offer a more efficient way to carry out cross-border payments, as funds can be moved between banks 24/7, minimising delays caused by banking hours and cut-off windows. This enables faster, cheaper access to cross-border payments, especially for emerging markets. 

However, while stablecoin payments have become more popular, payment infrastructure has struggled to keep up. Businesses often need to use multiple providers to process stablecoin payments, resulting in fragmented, inefficient processes. 

For example, a fintech sending stablecoin payments from Europe to the US may rely on:  

• A digital assets exchange for stablecoin access 
• A traditional bank for fiat accounts and payment rails 

There are solutions to this, though: for instance, banks like ClearBank offer stablecoin payment solutions combined with traditional payment rails, enabling you to integrate on-chain speed with regulated on- and off-ramping procedures.  

What’s more, the stablecoin market is growing at speed; it was worth $125 billion less than two years ago and is now around $255 billion. With this in mind, now is the time to futureproof your payments infrastructure, ensuring you’re ready to support stablecoin adoption as customer demand continues to grow. 

Some use cases where stablecoin payments are especially valuable include: 

1. An EMI operating across multiple regions can use stablecoins as an internal liquidity bridge. Rather than sending cross-border payments via correspondent banks, they can convert fiat into a USD-backed stablecoin, transfer it on-chain to its entity in another location, and redeem it locally. This makes treasury rebalancing instant and reduces the need for the EMI to pre-fund accounts. 
2. A fintech powering marketplace payouts can use stablecoins to accelerate cross-border settlements to regional payout partners 24/7. The local liquidity partner then converts and distributes funds domestically, based on the availability of the local payment infrastructure for payouts. 
3. Stablecoins can serve as another settlement rail for an EMI providing multicurrency wallets to SMEs. When a business initiates a cross-border transfer, the EMI can convert funds into stablecoin, transfer value instantly across borders, and redeem into local fiat at the destination. For the customer, the experience remains fiat-based, but the underlying infrastructure enables faster settlement. 

Stablecoins are currently the only cryptocurrency that’s regulated, making them more reliable. This is because the relevant regulations enforce strict rules on reserves and governance, mitigating concerns about reserve transparency. 

In Europe, stablecoins are regulated by the MiCA framework. MiCA in the EU classifies fiat-pegged stablecoins as ‘e-money tokens’ and imposes reserve and governance requirements, including the mandate that issuers maintain a 1:1 reserve of liquid assets.  

Note: only 18% of European businesses see regulation as a barrier to adoption, demonstrating that frameworks like MiCA give businesses the confidence to move forward with cryptocurrency payments.  

The US also has its own regulatory framework, GENIUS (Guiding and Establishing National Innovation for U.S. Stablecoins), established in 2025. It’s the first federal framework for stablecoins and requires digital assets to be backed by US dollars or short-term Treasury securities. 

The UK is progressing its own regulatory framework, with the FCA and the Bank of England outlining proposals to be implemented in 2026. 

ClearBank is a clearing bank built specifically for regulated fintechs in the UK and Europe, enabling you to scale confidently into new payment models – including stablecoins in Europe (and eventually the UK once the appropriate regulatory framework is established). ClearBank Europe is also the first Dutch credit institution to be authorised by the AFM as a Crypto Asset Service Provider (CASP) across Europe under MiCA. 

Our API-driven infrastructure seamlessly bridges fiat and stablecoin, integrating directly with your treasury systems to provide complete transparency and control over every transaction. 

Here’s why leading businesses choose to partner with us: 

Using multiple providers for stablecoin payments leads to fragmented processes and can increase the cost of your spend across integrations. 

ClearBank’s integrated solution removes this friction by combining stablecoin minting via our global partner, Circle, with our existing traditional payment rails, including SEPA and SEPA Instant.  

Cross-border payments can be completed with ease: on/off-ramping between fiat and stablecoins occurs within our regulated banking infrastructure, supporting fast, compliant fiat settlement. 

Your payments are sent near-instantly 24/7. This gives you timely access to information that supports better-informed liquidity management, as well as the opportunity to accrue more interest on your fiat funds.  

Regulation is still developing in the UK, but Europe has an established framework to support stablecoin payments under MiCA. 

While traditional banks might be hesitant to work with digital assets companies due to regulatory concerns, ClearBank takes a regulatory-first approach. That’s why we’ve partnered with Circle to offer its MiCA-compliant stablecoins, EURC and USDC. 

Stablecoins are a growing market, and getting your infrastructure in place now can prepare your business for an economy that’s increasingly adopting digital assets.  

With ClearBank, you’ll have the support of a dedicated relationship manager to help you and your team through the integration process. We’ll help you structure stablecoin on- and off-ramp flows, align with safeguarding requirements, and ensure minting and redemption processes operate smoothly.  

With over a decade of experience in banking, you’ll be working with a trusted provider that has the infrastructure in place to support your payments and the regulatory standing to ensure your payments are compliant.

Stablecoin payments can offer a cost-effective and efficient way to carry out cross-border transactions. Using a single provider for stablecoins and traditional payment rails can offer further operational efficiencies. 

With a banking infrastructure that supports payments in fiat and stablecoins, ClearBank offers a regulated, API-first banking experience to help you modernise cross-border payments. 

Want to learn more about our stablecoin payment product? Get in touch.