[Exclusive] Stablecoin Payments Surge at Companies for Vendor Settlements and Payroll

Stablecoin Market Expands

(Part 1) Stablecoin Payments Reach 540 Trillion Won

Service Fees Rank First at 75 Trillion Won

Some U.S. Companies Even Pay Salaries in Tether

To Expand Treasury Use

Infrastructure Build-Out, Stability Urgently Needed

Request Finance, a payment platform for businesses, enables companies to settle invoices from overseas vendors or freelancers in dollar stablecoins. According to the company, a staffing firm in Florida pays more than $100,000 a month in Tether to 80 to 100 freelancers in Latin America. Companies using global HR platform Deel also pay overseas developers, consultants and other contractors in dollar stablecoins for billed services.

Stablecoin payments are spreading globally as demand grows among companies seeking faster, cheaper ways to move money across borders. Stablecoins are starting to be used broadly in business-to-business transactions, including supplier payments, merchant settlement proceeds and payroll. The market is no longer confined to emerging economies. The U.S., as well as South Korea, ranked among countries receiving large volumes of stablecoin payments.

◇Used for Service Fees and Payroll

Global consulting firm Alvarez & Marsal's analysis of stablecoin payment activity showed that more than half of estimated payment volume from January through August this year went to businesses. That amounts to $230 billion to $340 billion.

Stablecoins were mainly used as a transaction medium for buying and selling cryptocurrencies such as Bitcoin. Because they are pegged to fiat currencies such as the dollar, they tend to be less volatile and are also convenient for trading other digital assets.

More recently, transfers between companies have emerged as a new use case. From January through August this year, business-to-business transfer volume was estimated at $137 billion to $153 billion. By use, service fees were the largest category at $56 billion. Payroll and compensation followed at $43 billion, ahead of remittances at $37 billion, service payments at $32 billion and supplier payments at $28 billion. Retail purchases by consumers totaled $19 billion, while payments whose purpose was difficult to identify came to $58 billion.

For companies, the appeal of stablecoins lies in their ability to cut the time and cost of sending money to counterparties. That advantage stands out in cross-border transactions, where funds can move faster than under traditional payment systems that pass through multiple financial institutions.

◇Beyond Emerging Markets to Developed Economies

Stablecoin payments were most active in emerging markets. Based on payment amounts for which the recipient country was identified, Thailand ranked first at $10.8 billion. It was followed by Turkey at $7.8 billion, Indonesia at $6.3 billion and Mexico at $6.1 billion.

Stablecoin payments were also substantial in high-income countries. The U.S. accounted for $5.7 billion. No specific figure was disclosed for South Korea, but it was cited as one of the major markets. Alvarez & Marsal said South Korea, along with Australia and Taiwan, was "close behind" the emerging-market leaders. That suggests stablecoin use is expanding beyond demand for dollars in emerging economies, where local currencies are unstable or banking services are underdeveloped.

Still, blockchain transactions have a limitation: It is difficult to determine which country a receiving wallet belongs to. As a result, payments for which the recipient country was confirmed accounted for only 13.5% of total estimated payment volume. Amounts for which both the sending and receiving countries were identified made up just 3.4%.

Companies also face significant hurdles to adoption. Even if stablecoins can be sent quickly, the benefits diminish if converting them into local currency and depositing the funds into a bank account takes time and incurs fees. Trading partners must also be willing to accept stablecoins, and corporate accounting systems need to be able to process inflows and outflows.

Kim Min-seung, head of research at DigitalX, said companies could make greater use of stablecoins in treasury operations if infrastructure for exchanging stablecoins and fiat currencies is expanded and redemption stability is secured. He added that clearer country-specific regulations and anti-money laundering standards would broaden their use.

Cho Mi-hyun, Hankyung.com reporter mwise@hankyung.com