Stablecoins: New Era for Payroll & Treasury

Would you like to get paid faster with stablecoin for your next gig?

Imagine receiving your paycheck instantly without waiting for bank transfers and with no delays due to weekends or holidays. Wouldn’t that be nice?

Now picture a company seamlessly managing its global treasury, moving funds across borders in seconds, without the headache of exchange rate fluctuations or banking fees. This isn’t a distant dream. It’s the power of stablecoins reshaping the financial landscape.

Stablecoins are digital assets pegged to real-world currencies. At first, stabelcoins were issued based on the US dollar – USDC (Cirlce), USDT (Tether), and DAI are the most commonly used. These stablecoins have paved the way to using blockchains for payments with a non-volatile asset, meaning you don’t have to worry you’ll grow to regret paying 10,000 BTC for 2 pizza.

We’ve explored how that makes foreign exchange faster and cheaper in a previous post. This time round, let’s look into how businesses can use them to change payroll and treasury management by offering speed, efficiency, and financial inclusivity.

Payroll

Traditional payroll systems rely on banks and intermediaries, leading to delays and high transaction fees. Employees, and especially contractors, based in countries outside the headquarters often face slow and costly wire transfers.

Stablecoins solve this by enabling near-instant, low-cost transactions globally. A company in the United States can pay a freelancer in Asia within minutes, rather than waiting days for a bank to process the payment. But what if your employee’s local economy isn’t based in the US dollar?

While USD-based stablecoins still claim the largest circulating volume today, the stablecoin market has grown to include a handful of other currencies. For example, Circle launched EURC (backed by Euro) in 2022 on Ethereum mainnet and introduced it to Solana in 2023. That eliminates the burden on your employees to bear the risks of FX rate changes from month to month.

What’s more is the ability to get paid without having a bank account. Emerging markets don’t always make getting a bank account easy. Millions of workers worldwide lack access to traditional banking systems, making stablecoins a game-changer for payroll. By using digital wallets, employees can receive salaries directly, bypassing expensive and unreliable banking infrastructure. This empowers gig workers, freelancers, and employees in emerging economies to access their earnings quickly and securely.

Treasury

Switching to the lens of employers, stablecoins also make treasury management much easier for companies operating in multiple countries.

A typical company may need to set up a few bank accounts for different needs – receiving funds, paying its people & vendors, earning interests on the cash balance, and more.

Imagine having to operate in 10 countries. Those bank accounts stack up fast. Their CFO would have to track money in all these bank accounts to know how much cash the companies have, let alone making sure the money doesn’t lose value when inflation racks up.

With stablecoins, companies could just set up 1 account to efficiently manage funds and move capital across subsidiaries in real time. The visibility it brings to CFOs also make it easier to project cashflow and figure out how to earn more interests on idle cash.

Beyond aggregation, stablecoins also simplify the day-to-day management with programmable money. This means companies can:

• Set up automated payments based on contracts signed with different vendors

• Distribute compensation to employees and contractors with smart contracts

• Easily reconcile global transactions that live on the blockchain rather than 10 bank account statements

For businesses operating in regions with high inflation, stablecoins provide a hedge against currency devaluation. Holding funds in USD-pegged stablecoins ensures that value remains stable, protecting both companies and employees from local currency fluctuations.

While stablecoins offer immense benefits, regulatory concerns remain. Governments and financial institutions are closely monitoring stablecoin adoption, emphasizing compliance, security, and transparency. Businesses looking to integrate stablecoins must navigate evolving regulations and ensure adherence to financial laws.

The Future of Stablecoin-Powered Finance?

As stablecoins gain traction, we are moving toward a world where payroll and treasury management become frictionless, inclusive, and efficient. The shift from traditional banking to blockchain-powered solutions signals a financial revolution that could redefine how businesses and employees interact with money.

Are you ready to embrace the stablecoin era? Let us know your thoughts on the future of payroll and treasury management in the new age!