Stablecoins: How USDT and USDC are Redefining Payments in 2025

Stablecoins have emerged as a revolutionary tool in the world of finance and business. They are digital currencies that keep a stable price and usually derive their value from underlying collateral, often a combination of USD and US Treasuries. They provide cheap transactions, fast settlement, and the ability for anyone to access US dollars.

Types of Stablecoins

Stablecoins fall into three categories:

• Fiat-Collateralized Stablecoins: Backed by real-world assets such as USD or government securities. These are the most trusted due to their tangible collateral but have downsides, such as centralization, where a single entity or group controls much of the tokenization process.
• Crypto-Collateralized Stablecoins: Backed by other cryptocurrencies and are more decentralized. However, many iterations have failed, resulting in low trust levels.
• Algorithmic Stablecoins: Maintain value using algorithms and smart contracts. These are highly experimental, and many have failed due to their inherent complexity and lack of trust.

Although, crypto-collateralized and algorithmic stablecoins face challenges, future innovations may address these issues.

The Dominance of Fiat-Collateralized Stablecoins

Fiat-collateralized stablecoins dominate 93% of the market, due to their reliability and trustworthiness. For this reason, our focus will be on these types of stablecoins. Within this sector $170 billion of the total $188 billion stablecoin market is just USDC and USDT, and they are by far the two most trusted in the industry. USDT and USDC control about 90% of the entire market cap of all types of stablecoins. USDT was created in 2014 by a company named Tether and has become the largest and one of the most trusted stablecoins in the world.

Key Stablecoins: USDT and USDC

USDT (Tether)

The USDT stablecoin is backed by roughly 70% of US Treasury bills, cash equivalents, and other assets like precious metals and Bitcoin. They earn profit through earning the interest paid to them on the USD Treasuries that they buy. The profits that they earn go to purchasing more Bitcoin and precious metals to help grow the supply of USDT. While they only have roughly 30 employees, they have managed to generate billions in profits due to a lack of a large overhead which holds back many other companies.

USDT is issued on many different chains but roughly 89% is issued on Ethereum and Tron. This probably will surprise many people that USDT is listed mostly on Tron but this is because there weren’t many options years ago for choosing blockchains and at the time Tron was the most widely adopted chain amongst exchanges, was (still is) cheap, and fast. Due to these reasons along with its growth in popularity, Tron has become a hub for USDT.

For many years there have been questions about whether or not USDT is backed by what they claim it is. To combat this, USDT issues a quarterly audit report and an up-to-date list of how much USDT is issued on each chain. While it isn’t a perfect system, it is better than just relying on trust.??

USDC (USD Coin)

USDC is a stablecoin consortium started by Circle and Coinbase in 2018 and currently holds the second-largest market cap of all stablecoins. USDC is backed by a fund custodied by Blackrock that consists of a combination of Treasury bills with maturity of less than 30 days and US Repurchase Agreements (Repo). A repurchase agreement (repo) is a short-term loan where one party sells securities to another with the agreement to buy them back at a higher price later, usually the next day or within a few days. The fund’s average maturity, the average time for the securities to mature, is 14 days. This means that there is less risk in the fund because it allows for higher levels of liquidity and more stability if there are redemptions, or requested withdrawals from the fund.?

USDC’s $34 billion is minted on 16 different blockchains and has close to 75% issued on Ethereum with 9% issued on Solana coming in second. While USDC has expanded to many chains, Ethereum has maintained its dominance over the years and its dominance will likely continue into the near future.

Since Coinbase is arguably crypto’s blue-chip stock, there is a lot of transparency with their audits and financial statements. These audit reports are available on their website, monthly going back to its creation in 2018. While USDT has a lot of trust associated with its brand, USDC is more more transparent.

Benefits of Stablecoins

Stablecoins offer a groundbreaking way to handle payments, offering unparalleled speed, cost efficiency, and global accessibility. Let’s break down what makes stablecoins attractive:

1. Cheaper Money Movement

Traditional payment systems, especially credit card networks, charge merchants processing fees of 2-3% per transaction. With stablecoins, especially on optimized blockchains, transaction fees can be as low as fractions of a cent. While there are still costs associated with converting stablecoins to fiat currency (around 1-3% depending on the platform), these fees are decreasing rapidly. Within 12-36 months, we could see providers competing within a less-than-1% conversion rate space, making stablecoins a much cheaper alternative to credit cards and even traditional bank transfers.

2. Faster Transactions

Speed is another major advantage. Stablecoin transactions settle in near real-time, often within seconds or minutes, depending on the blockchain. Compare this to traditional ACH transfers, which take 1-3 business days, or even wire transfers, which can also take several days, especially internationally. Faster settlements mean you can access your funds immediately, improving cash flow and reducing the risk of delays.

3. Stability of Value

Unlike volatile cryptocurrencies like Bitcoin or Ethereum, stablecoins such as USDC and USDT maintain a 1:1 peg to the US dollar, ensuring that their value remains stable. For businesses, this means they can confidently accept stablecoins without worrying about the value fluctuating between the time of payment and cashing out.

4. Global Support

Stablecoins transcend borders, allowing businesses to tap into a truly global customer base. Unlike traditional banking systems that are siloed by country, stablecoin transactions can be made by anyone with an internet connection and a digital wallet. This is particularly beneficial in regions with unstable currencies or high inflation. For instance, businesses in countries like Argentina, Venezuela, or Turkey can accept stablecoins as an alternative to their local currency, protecting themselves from inflation while offering their customers the stability of the US dollar.

5. Ease of Conversion to Cash

Stablecoins can be easily converted back into fiat currency when needed, providing flexibility. Platforms like Coinbase, Binance, or even traditional payment gateways that have started supporting stablecoins make this process seamless. Over time, as competition grows, conversion fees are expected to drop significantly, further enhancing the appeal of stablecoins.

6. Hard-to-Track Payments for Privacy

While not completely anonymous, stablecoin transactions offer a level of privacy that traditional banking systems cannot. This can be a draw for businesses and customers who value discretion.

7. Non-Reversible Transactions

One of the most significant benefits of stablecoins is that transactions are non-reversible. This eliminates the risk of chargebacks, a common pain point for businesses, particularly those in high-risk industries or sectors prone to fraud. Once a customer sends a stablecoin payment, it’s final, reducing disputes and making cash flow more predictable.

8. Fraud Reduction

With stablecoins, the risk of fraud is significantly reduced. Since transactions require the sender to have sufficient funds in their wallet, there’s no concern about bounced checks or declined payments. This certainty provides peace of mind for businesses accepting high-value or international payments.

Why Businesses Should Start Accepting Stablecoins

Over the past few months, many business owners have approached me with questions about accepting stablecoins as a payment method. Some immediately see the potential benefits, while others are simply curious. Regardless of their starting point, one thing is clear: there isn’t yet a perfect platform that caters to every business's needs. To help businesses adopt stablecoins effectively, we need to simplify the process and address several key challenges.

Challenges with Current Infrastructure

Today, platforms like Coinbase Commerce and Stripe are making strides in enabling businesses to accept stablecoin payments, but the ecosystem still has gaps. Platforms like BitPay, once a leader in crypto payments, have lost their edge due to overexpansion and underdelivery. Meanwhile, newer entrants like Stripe are still rolling out features for stablecoin payments, and Coinbase Commerce remains somewhat limited in functionality for non-tech-savvy users.

For business owners exploring this space, key questions often arise:

• Which tokens should I accept? USDC and USDT are the dominant stablecoins, but businesses may also want to support others.
• Which blockchains should I support? Ethereum, Tron, and Solana are popular, but each has its trade-offs in terms of cost, speed, and adoption.
• Do I need a wallet? Many businesses are unfamiliar with creating or managing digital wallets, adding a layer of complexity.

A Missing Piece in the Market

What’s missing is a solution that offers a seamless, end-to-end experience: enabling businesses to accept stablecoins, settle payments instantly, and convert them into their preferred currency—all in one place. For example, imagine a platform where a business could:

1. Accept USDC as payment.
2. Instantly convert the USDC to USD or another cryptocurrency like Bitcoin.
3. Deposit the converted funds into their bank account in real time.

This type of infrastructure would revolutionize stablecoin adoption, making it as simple as accepting a credit card payment today.

Case for Abyiss

Abyiss, the platform we’re building, aims to fill this gap. Our mission is to provide businesses with a simple and reliable way to accept stablecoins and settle transactions effortlessly. Abyiss will allow businesses to:

• Accept stablecoin payments with minimal fees.
• Instantly convert stablecoins into USD, BTC, or other currencies of their choice.
• Integrate seamlessly with existing systems or platforms.
• Provide support for multiple blockchains and tokens, giving businesses the flexibility to choose what works best for them.

The Future of Stablecoin Payments

The demand for stablecoin payments is growing rapidly, and the benefits are too significant to ignore. From cost savings to faster transactions, reduced fraud, and global accessibility, stablecoins are transforming the way we approach payments. While the infrastructure is still evolving, platforms like Abyiss are poised to bridge the gap, making stablecoins a viable payment option for businesses of all sizes.

For those forward-thinking businesses willing to embrace stablecoins, the opportunity is clear: lower costs, faster settlements, and a competitive edge in a rapidly digitizing world. It’s not a question of if stablecoins will become mainstream—it’s a question of when.

-Written by Drew Gillen and Christopher Perrotta