How do stablecoins compare to traditional payment methods?

Overview

Australian businesses rely on a range of traditional payment methods, including bank transfers, cards, and international remittance services. Stablecoins introduce an alternative payment rail that operates on blockchain networks rather than banking infrastructure.

This article compares stablecoins with traditional payment methods across cost, speed, settlement, transparency, and operational impact to help businesses understand where stablecoins may offer advantages or trade-offs.

Payment speed and settlement times

Traditional payment methods often rely on banking cut-off times, batch processing, and intermediary settlement layers.

Domestic bank transfers typically settle within business hours, while international payments may take several days due to correspondent banking processes.

Stablecoin transactions, by contrast, can settle within minutes on public blockchain networks, regardless of time zones or banking hours. This enables near real-time settlement for both domestic and cross-border payments.

Transaction costs and fees

Payment costs vary significantly depending on the method used.

Traditional payment methods may involve:

• Bank transfer fees
• Foreign exchange margins
• Intermediary and correspondent banking charges
• Card processing fees

Stablecoin transactions typically incur blockchain network fees, which are often predictable and independent of transaction value. For some business use cases, this can reduce overall payment costs, particularly for international transfers.

Transparency and traceability

Traditional payment systems provide limited real-time visibility once a transaction has been initiated. Businesses often rely on bank statements or payment confirmations that update after settlement.

Stablecoin transactions are recorded on public blockchains, allowing businesses to:

• Track transaction status in real time
• Verify settlement independently
• Maintain transparent transaction records

This transparency can improve reconciliation and audit processes.

Operational flexibility

Traditional payment methods are closely tied to banking infrastructure and operating hours.

Stablecoins operate continuously, allowing businesses to send and receive payments outside standard banking windows. This can be particularly valuable for businesses operating internationally or managing time-sensitive settlements.

Risk considerations

Each payment method carries its own risks.

Traditional systems involve counterparty, settlement, and operational risks linked to financial institutions.

Stablecoins introduce different considerations, including issuer risk, custody management, and blockchain network reliability. Businesses must assess these risks alongside their existing payment processes.

Regulatory and compliance factors

Both stablecoins and traditional payment methods are subject to regulatory oversight.

In Australia, stablecoin usage is shaped by AML/CTF frameworks and compliance obligations that apply to service providers facilitating payments. Traditional payment methods are governed by established banking and financial services regulations.

For businesses, compliance typically involves choosing payment partners that operate within appropriate regulatory frameworks.

When stablecoins make sense compared to traditional methods

Stablecoins may be well suited to scenarios where businesses prioritise:

• Faster settlement times
• Cross-border payment efficiency
• Reduced reliance on banking cut-offs
• Transparent transaction records

Traditional payment methods may remain preferable for purely domestic transactions or where existing banking workflows already meet operational needs.

Key takeaways for Australian businesses

Stablecoins and traditional payment methods each have strengths and limitations.

• Traditional methods offer familiarity and established infrastructure
• Stablecoins offer speed, transparency, and operational flexibility
• The right choice depends on business needs and risk tolerance

Many businesses adopt a hybrid approach, using stablecoins alongside traditional payment rails to optimise efficiency and settlement outcomes.

Related guides: do stablecoins require a bank account?, how faststables support stablecoin payments for businesses works, and what regulations apply to stablecoins ?.