Stablecoins and Cross-Border Settlement: Implications for Private Deals

Stablecoins are digital tokens designed to hold a stable value, usually one US dollar, backed by reserves such as cash and short-term government debt. Once used mainly for crypto trading, they have become a practical tool for moving money across borders quickly and cheaply.

Regulation has also caught up. The European Union's Markets in Crypto-Assets rules began applying to stablecoins in 2024, and the United States passed the GENIUS Act in July 2025, creating a federal framework for payment stablecoins. For founders and investors in cross-border private deals, stablecoins are now worth understanding, even if most funding rounds still close in traditional bank transfers.

1. Why Stablecoins Matter for Cross-Border Business

• Speed. Transfers can settle in minutes, any day of the week, compared with days for some international wires.
• Cost. Fees can be lower than traditional cross-border payments, especially for smaller amounts and emerging-market corridors.
• Dollar access. Businesses in countries with volatile currencies or limited dollar banking can hold dollar-denominated value.
• Programmability. Payments can be automated through software.

2. Where Stablecoins Are Used Today

• Payroll and contractor payments for globally distributed teams.
• Treasury management for startups in markets with unstable currencies. See how currency risk erodes cross-border returns.
• Supplier and trade payments across borders.
• Remittances and consumer payments, particularly in emerging markets. See Africa's fintech funding story and Latin America's venture reset.
• Occasionally, investment settlement, though most institutional venture rounds still use bank transfers.

3. Implications for Private Deals

• Funding rounds. Most investors, particularly funds, are restricted by their fund documents, banks and compliance policies to traditional payment rails. Stablecoin settlement is more common among crypto-native investors.
• Company treasury. Investors increasingly ask how portfolio companies hold cash, including any stablecoin balances, and how they manage the risks.
• Diligence. For companies that use stablecoins, investors review issuer choice, custody, accounting, controls and compliance.
• Exits and distributions. Proceeds are almost always paid through traditional banking for now.

4. Risks to Manage

• Issuer risk. A stablecoin is only as good as its reserves and issuer. In March 2023, USDC briefly lost its dollar peg when part of its reserves was held at Silicon Valley Bank.
• Custody. Lost keys or compromised wallets can mean permanent loss.
• Compliance. Anti-money-laundering, know-your-customer and sanctions rules still apply.
• Banking relationships. Some banks remain cautious about customers moving funds to and from stablecoins. See startup banking after SVB.
• Accounting and tax treatment, which varies by jurisdiction.
• Regulatory change, as rules continue to develop worldwide.

5. Practical Guidance

• For founders: use stablecoins for operational needs such as payroll or supplier payments if they help, but keep core treasury policies clear, documented and approved by your board.
• For investors: ask portfolio companies about stablecoin use as part of treasury diligence, and check your own fund documents before accepting or sending stablecoin payments.
• For both: choose regulated issuers and reputable custodians, and take legal and tax advice in each relevant jurisdiction.

Frequently Asked Questions

Are stablecoins safe?

They carry issuer, custody and regulatory risks. Regulated issuers with transparent, high-quality reserves reduce but do not eliminate those risks.

Can a startup raise a round in stablecoins?

It is possible, particularly with crypto-native investors, but most institutional investors still require traditional bank transfers.

Do stablecoins remove currency risk?

They let businesses hold dollar-denominated value, which can reduce local currency exposure, but they do not remove other risks.

Are stablecoins regulated?

Increasingly, yes, through frameworks such as the EU's MiCA rules and the US GENIUS Act, though details vary by jurisdiction.

The Bottom Line

Stablecoins are becoming a practical tool for cross-border payments and treasury management, supported by new regulation. For private deals, their role is still mostly operational rather than central to funding rounds. Founders and investors who understand the benefits and the risks can use them where they help, without taking on hidden exposure.

Global Capital Network connects fintech founders and investors across global markets through our events and investor network. Get in touch to learn more.

This article is general information, not legal, tax or investment advice.