Every company needs a stablecoin strategy

August 2026 | SPOTLIGHT | BANKING & FINANCE

Financier Worldwide Magazine

August 2026 Issue

A stablecoin is a type of cryptocurrency designed to maintain a steady value by pegging its price to a real-world asset, most commonly the US dollar. Stablecoins today play a growing role in cross-border payments, corporate settlement, treasury, collateral, tokenised assets, remittances, aid and financial market infrastructure.

They are also likely to become important in automated, agentic and machine to machine payment systems, where agents or software pay for data, services or digital infrastructure without waiting for manual payment approval.

Stablecoins

Stablecoins offer several practical benefits that combine the stability and safety of fiat money with the technical benefits of cryptocurrencies.

They combine a relatively stable reference value – most frequently they are backed by the US dollar – with the technical features of blockchain networks including continuous, 24/7 operation, cross-border, near-real-time settlement, low-cost transactions for both microtransactions and high-value transactions, transparency, auditability and programmability.

Stablecoins are often commercially useful. Unlike volatile cryptoassets, a fiat-backed stablecoin provides a more predictable unit of account for payments, collateral, pricing and treasury operations. Unlike many traditional payment rails, a stablecoin can move outside banking hours and across borders without relying on long correspondent-banking chains.

Stablecoins may reduce settlement delay, improve payment visibility and lower costs in some cross-border or internet-native contexts and can support merchant settlement, marketplace payouts, embedded finance, payroll-like flows, corporate treasury transfers, business to business payments and trade finance. They can also make small and micro payments more viable, including payments for application programming interface access, content, software services or pay-per-use digital products.

Stablecoins support many of the efficiencies of tokenisation, which is becoming a new operating model for money and markets. Tokenisation changes not only the form in which assets are represented, but also the way payment, settlement, custody, collateral and reporting may be organised around them.

As securities, funds, receivables, commodities and other assets come to be represented on programmable systems, the tokenised asset becomes more useful where the payment leg can also settle efficiently, safely and with legal certainty.

Stablecoins offer the on-chain programmability, speed and low cost of settlement needed. They are the key payment mechanism for tokenised markets where they serve as the cash leg for primary issuance, secondary-market delivery-versus-payment, distributions, collateral movements and on-chain financing.

Alternatives compared

There are other forms of on-chain digital cash. Tokenised money, near-money instruments and stablecoins differ legally and bring different advantages and risks.

A tokenised deposit remains, if properly structured, a claim against a bank. It sits within the banking perimeter and may preserve familiar prudential protections and the bank-customer relationship.

Tokenised money-market funds may be attractive as yield-bearing collateral or liquidity-management instruments, but they are fund or securities interests in underlying assets. They help treasury teams manage collateral and liquidity but are less ordinary payment instruments than treasury, margin, collateral and liquidity management than everyday commercial payment.

A stablecoin is usually a claim against an issuer, contractual arrangement or reserve structure, rather than a deposit claim against a bank. Stablecoins distribute money through software networks as well as through financial institutions.

Stablecoins differ from central bank digital currencies (CBDCs) in benefits, commercial opportunity and risks. The UK’s retail digital pound work remains in design and assessment, with continued emphasis on privacy, user control and access to cash. Wholesale settlement experimentation is more immediately relevant to institutions. CBDCs raise separate public-money questions and risks, especially around privacy and surveillance.

Adoption

Much of the adoption of stablecoins will depend on their interoperability. A stablecoin, tokenised deposit or tokenised fund has limited value if it sits in a closed environment that cannot connect with the company’s banks, custodians, trading venues, payment providers, treasury systems and compliance tools.

As of mid-2026, stablecoin supply is around $300bn, with fast and widely growing global adoption and regulation that has moved from discussion to implementation. The Markets in Crypto-Assets Regulation is now operational in the European Union for e-money tokens and asset-referenced tokens. The US Guiding and Establishing National Innovation for US Stablecoins Act was signed into law in July 2025. In the UK, the Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026 establish the legal framework for the new cryptoasset regime and are expected to come into force in 2027.

The Bank of England has been examining how central bank money can connect to external ledgers and how its real-time gross settlement system can synchronise the two legs of a transaction. The UK’s Digital Securities Sandbox, run jointly by the Bank of England and the Financial Conduct Authority, allows firms to issue, trade and settle genuine digital securities under live regulatory supervision.

UK Finance has conducted tokenised sterling deposit pilots with major banks. HM Treasury has selected HSBC’s Orion platform for its Digital Gilt Instrument pilot, a tokenised government bond. Banks and market infrastructures are also testing tokenised deposits, digital securities and settlement links. These developments are not just about cryptoassets but more broadly about the role of stablecoins in financial markets and programmable money in market infrastructure.

A future payments ecosystem will most likely involve a combination of commercial-bank money, tokenised deposits, stablecoins, tokenised funds and central-bank money, each performing particular functions. Individual companies will have to understand which form of money is most appropriate for them and for which workflow.

Risks

A fiat-backed stablecoin can fail for conventional financial reasons including weak reserves, unclear redemption rights, improperly segregated assets, an issuer in an awkward jurisdiction or holders who prove to have no enforceable claim.

It can also fail for operational reasons, including compromised keys, smart-contract vulnerabilities, weak governance, or failure of a bridge between systems, a custodian or an exchange in the chain. The systemic implications increase as stablecoins move closer to ordinary payments and collateral.

A large depegging event (where the stablecoin loses its one-to-one redemption with the underlying fiat asset), redemption freeze, issuer failure, cyber attack or sanctions disruption could affect payment flows, treasury liquidity, customer refunds and collateral calls.

Stablecoins are also used in crime and money laundering because they combine a stable price with rapid cross-border movement. Fiat-backed stablecoins on public chains can be monitored, traced and, in some cases, frozen and seized by blockchain analytics tools.

However, by the time funds have been split across addresses, bridged, swapped and sent through offshore exchanges, the recovery window may have closed, so companies using stablecoins should know in advance which blockchain analytics and investigations providers they would instruct, what data they would need, who can authorise escalation, and which issuers, exchanges or law-enforcement contacts may be relevant.

These risks can be mitigated through full preventative and continuous cyber security, full team training to prevent attacks through social engineering and a comprehensive blockchain analytics strategy.

For banks, stablecoins also raise questions about deposit outflows and the singleness of money. The policy concern is that one pound should remain equivalent to another pound, regardless of whether it is held as bank money, e-money or a regulated token.

Checklist

A practical checklist for companies considering accepting, holding or using stablecoins should ask questions. Who is the issuer? Where is it regulated? What legal claim does the holder have? What backs the token? Are the reserves segregated? Can it be redeemed at par, by whom, and how quickly? Who controls the smart contract and private keys? Which custodian, exchange, wallet or bridge is involved? What is the issuer’s audit or assurance process? Can issuer controls freeze or restrict suspicious addresses? How are sanctions, fraud and laundering risks monitored? When is settlement legally and operationally final? What market-integrity, consumer-protection or investor-protection rules apply? What accounting, tax and audit treatment follows? What happens if the issuer, custodian or provider fails?

A dollar-referenced stablecoin may feel economically similar to holding dollars but may not necessarily be treated as currency for accounting or tax purposes. The legal rights attached to the token may affect balance-sheet presentation, foreign-exchange treatment, taxable gains and losses, audit evidence and internal reporting. A token usable in one market may be unsuitable, unauthorised or difficult to redeem in another.

Strategy

Given their fast-growing role in finance and payments, stablecoins are likely to reach many companies before those companies have decided what they think about them.

An international supplier may ask to be paid in stablecoins, a payment provider may offer stablecoin settlement or a marketplace may want to pay overseas sellers on chain. Companies that deal with payments, treasury, digital platforms, cross-border flows, financial assets, regulated counterparties or automated digital commerce should therefore still understand how stablecoins could affect them.

Rather than beginning with a general approval or ban, companies could identify two or three plausible use cases such as cross-border supplier payments, marketplace payouts, tokenised collateral or treasury liquidity. A useful corporate policy can be tiered. Some uses may be prohibited and some permitted only with immediate fiat conversion. Treasury holding may be allowed for approved issuers, within exposure limits.

Compliance, identity and resilience need to be designed into any stablecoin workflow at the beginning. If they are added only after the commercial model has been chosen, they will usually be weaker, more expensive and less likely to match the way the product actually works.

Companies should also decide their broader view on the cash leg of tokenised activity, depending on their sector, geography, counterparties and risk appetite. Some may prefer tokenised deposits through regulated banks. Others may use regulated stablecoins for specific cross-border or platform-based flows. Some treasury teams may focus on tokenised money-market funds for collateral and liquidity management while avoiding stablecoin balances.

In the absence of a working stablecoin strategy made in advance of any decision needing to be made, the risk to a company is that those decisions may commercially need to be made – but under client pressure or deadline, potentially without the due time to take a consistent view of the legal, tax, accounting, sanctions, cyber and operational status, opportunities and risks.

Conclusion

In the end, a company will only use stablecoins if they are better than the current payments systems and improve its customer service. In many uses, stablecoins are faster and cheaper than traditional payment methods. In their early days, there was regulatory uncertainty and few well-known and trusted service providers.

We are through that stage now. Stablecoins are fast becoming the first ‘killer app’ for crypto. Thus, companies should have a stablecoin strategy.

Charles Kerrigan is a partner at CMS. He can be contacted on +44 (0)20 7067 3437 or by email: charles.kerrigan@cms-cmno.com.

Charles Kerrigan

CMS