A payment that should not take four days
A manufacturer in Lagos pays a supplier abroad. The money leaves a naira account, passes through a correspondent bank, gets converted somewhere along the way, and arrives days later minus fees nobody quoted at the start. The finance team does not know exactly when it will land or exactly how much will arrive. This is the ordinary experience of cross border business payments, and it is why stablecoins attract serious attention from treasurers, not only from speculators.
The attention is deserved, up to a point. The point is worth locating carefully.
What a stablecoin actually is
A stablecoin is a digital token designed to hold a steady value, usually by being backed one for one by reserves such as cash or short term government securities, or by other mechanisms. The best known ones track the US dollar. Because they move on public blockchains, they can be sent between wallets at any hour, any day, without a bank being open.
That last property is the whole appeal. Settlement can be fast and continuous, and the cost of moving value across borders can be low compared with traditional correspondent chains. For a business paying overseas suppliers, or receiving dollars from foreign customers, the pitch is simple: skip the slow middle.
Where the promise is real
There are genuine strengths, and it would be dishonest to wave them away.
- Speed and availability. A transfer does not wait for banking hours or for a chain of intermediaries to each process it.
- Predictability. When you send a dollar token, the amount the recipient gets is clearer than in a multi hop wire where each bank may deduct something.
- Access to a dollar like asset. In economies with currency volatility or tight foreign exchange availability, holding a dollar denominated balance is attractive to businesses as well as individuals.
- Programmability. Payments can be tied to conditions, such as release on delivery, in ways that ordinary bank rails do not easily support.
For some corridors and some businesses, these benefits are practical, not theoretical.
Where it stops being simple
The difficulty is that moving the token is the easy part. Business payments are surrounded by things the token does not solve.
On and off ramps. Your supplier does not want tokens, they want money in a bank account. Somebody has to convert naira to the stablecoin at one end and the stablecoin to local currency at the other. Those conversions carry spreads, fees and counterparty risk, and the quality of the ramp often matters more than the quality of the token. A fast blockchain transfer sandwiched between two slow, expensive conversions is not a fast payment.
Regulation. Rules differ by country and keep changing. Some jurisdictions have built licensing regimes for stablecoin issuers and service providers. Others restrict or discourage crypto asset activity for businesses and banks. In Nigeria, the position of regulators on digital assets has shifted over the years, and any company planning to use them for trade payments needs current legal advice, not a blog post. The same applies in the UK and Ghana, where the frameworks are different again.
Reserve and issuer risk. A stablecoin is only as stable as the reserves and governance behind it. Holders depend on the issuer's ability to redeem at par. Reserve quality, transparency, and legal claims in a failure all matter, and they vary between issuers. Some stablecoins have lost their peg in the past. A treasurer should treat the issuer as a counterparty and assess it like one.
Accounting, tax and audit. Your auditors need to know how to classify a token balance. Your tax adviser needs to know when a conversion creates a taxable event. Your bank may ask questions about the source of funds. These are solvable, but they are work.
Compliance. Anti money laundering and sanctions checks apply to business payments however they move. Moving value on a public ledger does not exempt anyone from knowing who they are paying and why. In practice, screening and record keeping become more important, not less, because a regulator can see the trail.
A useful habit is to price the whole journey, not the leg that moves on a blockchain. Ask what the supplier receives in their own bank account, in their own currency, and how long it took from the moment you approved the payment.
The operational side is where businesses get hurt
Most trouble in practice is mundane. Wrong network selected, so funds go to an address that cannot receive them. Wallet keys held by one person who then leaves. A payment approved by one signature because the wallet tooling had no approval workflow. Reconciliation that depends on matching a blockchain transaction hash to an invoice by hand.
Treasury controls that exist for bank payments, such as segregation of duties, dual approval, limits and audit trails, need to exist here too. A token transfer is irreversible. There is no recall message to the bank. That makes pre payment validation and approval policy more valuable, not less.
A sensible way to approach it
We would not tell a business to avoid stablecoins, and we would not tell it to rush in. A measured path looks like this:
- Pick one corridor and one use case, with a payee who is willing and able to receive this way.
- Use regulated, reputable providers for conversion and custody rather than assembling the pieces yourself.
- Compare the total landed cost with your current method, including ramp spreads and staff time, not only the network fee.
- Write down the control policy before the first payment: who approves, what limits apply, how records are kept.
- Keep your bank relationship informed from the start.
What to remember
Stablecoins improve one segment of a cross border payment: the movement of value between two points. They do not remove the need for conversion, compliance, controls or accounting. The businesses that benefit most will be those that treat them as one more payment rail, managed with the discipline they already apply to the others, and that measure success by what arrives, when, at what all in cost.