The Future of Payroll: What is Stablecoin?

It’s the end of the day: you’ve just gotten through the late-day rush. You start cleaning up and getting things ready for the next day, performing all of the necessary closing duties and tasks. At this point, the only thing you can think about is getting home, throwing yourself on the bed, and waking up at 9:00 pm in a daze after you accidentally fell asleep. This is probably a familiar scenario for many business owners, and when you find yourself in this state, it’s likely the last thing you want to do is think about the future and where your business will be in five or ten years. But the daily stress and exhaustion that come with running a business may only worsen over the years without a certain level of forward thinking. That’s because, if you find yourself behind, you’ll need to start spending more time and effort in your day-to-day to catch up.

At Payday HCM, we’re very familiar not only with the seemingly non-stop effort to keep a business running in the present, but also with the added stress and exhaustion that comes with finding ways to ensure your business will still be open in the future. We receive plenty of questions from our clients about all kinds of different buzzwords and seemingly new technologies set on transforming how businesses do business. Recently, the question of cryptocurrency has been one that comes up a lot, especially considering how many different ones are out there. Without the right source, differentiating between what can really help your business and what may not can be a difficult task.

That’s why, in this article, we’ll be going over one specific kind of cryptocurrency, one that’s become increasingly more popular amidst the rise of cryptocurrency: stablecoin. We’ll be breaking down what stablecoin is and how it can potentially transform your business’s approach to payroll. We’ll start with outlining what stablecoin is and how it differs from other cryptocurrencies before diving into the specific on using stablecoin for different business transactions and even payroll. Finally, we’ll go over the regulatory landscape of stablecoin and what businesses should keep in mind before considering offering stablecoin as a payroll solution.

In this article, you will learn:

• What Is Stablecoin?
• Making Payments and Payroll with Stablecoin
• Regulations and Rules Regarding Stablecoin

What Is Stablecoin?

Before we get into how stablecoin can transform your business’s approach to payroll, we first need to cover what stablecoin is and how it differs from other cryptocurrencies.

Defining Stablecoin and Its Purpose

Stablecoins are a category of cryptocurrency designed to maintain a stable value, most commonly by being pegged to a traditional asset such as the U.S. dollar. Unlike other cryptocurrencies, such as Bitcoin or Ethereum, which are known for their dramatic price volatility, stablecoins aim to provide price consistency while retaining the speed, transparency, and programmability of blockchain-based transactions (hence the name “stable”-coin).

Another differing factor between stablecoin and other, more traditional cryptocurrencies is how stablecoin is used. While all cryptocurrencies can be used to facilitate transactions, stablecoins are particularly popular in this regard, given that they are pegged to more stable assets. This is especially true for international transfers, as it removes the need for both parties to have multiple bank accounts in multiple countries.

How Stablecoins Maintain Price Stability

As stated above, stablecoins are notable for their stability in value. There are a few different ways that stablecoins can be backed in order to achieve this stability. This includes:

• Fiat-backed stablecoins: the most common type of stablecoin, these are supported by reserves of cash or cash-equivalent assets held by the issuer.
• Commodity-backed stablecoins: these stablecoins are tied to tangible assets or commodities with the issuer holding the commodity and buying or selling the commodity to maintain the stablecoin’s peg.
• Crypto-collateralized stablecoins: these stablecoins are pegged to other cryptocurrencies and, similarly to commodity-backed stablecoins, the issuer will buy or sell the backing cryptocurrency to maintain the stablecoin’s value.
• Algorithmic stablecoins: these kinds of stablecoins use automated mechanisms to adjust supply rather than holding reserves.

As mentioned above, stablecoins aim to combine the transactional benefits of cryptocurrency with the stability of more traditional fiat currencies, meaning stablecoins aren’t often used as a form of investment.

Making Payments and Payroll with Stablecoin

Now that we understand more about what stablecoin actually is and how it can be used, we can dive deeper into how businesses can use it to facilitate transactions and even to pay their employees.

Using Stablecoins for Payroll and Workforce Payments

Stablecoins, with their decreased volatility compared to other cryptocurrencies, are increasingly being explored as a potential method for payroll, particularly for businesses with remote or international employees. Traditional cross-border payroll can involve high fees, slow settlement times, and limited access to banking infrastructure. Stablecoins can potentially help to address these challenges with faster transfers to digital wallets, often at a lower cost.

When it comes to payroll, stablecoins function more as a delivery mechanism, not a whole-hearted replacement for payroll systems. Wages are still calculated in fiat currency, and employees must voluntarily opt in to receive payment in stablecoin. This does provide employees with flexibility, though, in terms of how they receive their checks.

Stablecoins in B2B and Enterprise Transactions

In addition to payroll, stablecoins can be utilized for vendor payments, contractor compensation, and international settlements. Stablecoin-based transactions to contractors and vendors provide all of the aforementioned benefits of stablecoin transactions, with both businesses only needing one digital wallet each to facilitate the transfer, and without the potential for slowdowns due to bank settlements.

Like using stablecoins for payroll, utilizing stablecoins in B2B transactions can be particularly beneficial for businesses that frequently engage in cross-border transactions. This is because stablecoin can limit the amount of time it takes for these transactions to clear—often in minutes as opposed to days—and can limit costly processing fees.

Regulations and Rules Regarding Stablecoin

Now that we understand what stablecoin is, as well as its potential uses for business transactions and payroll, we’ll go over what the regulatory landscape looks like for stablecoin and what employers should keep in mind when it comes to crypto.

Regulatory Frameworks and Government Oversight

Part of the draw of stablecoin, and cryptocurrency in general, is its decentralization. As stablecoin adoption grows, however, regulators across the world are working to establish clearer rules governing their issuance and use. Proposed federal frameworks, including legislation focused on payment stablecoins, aim to define who may issue stablecoins, what types of reserves must be held, and how redemption and disclosures are managed.

In the U.S., the GENIUS Act is the first example of regulation regarding stablecoin transactions. Passed on July 18, 2025, the Act includes provisions like:

• Capital, risk, and liquidity requirements written by financial regulators for issuers within 18 months of passage to ensure stable value.
• Conditions set by the Treasury, the Federal Reserve, and the Federal Deposit Insurance Corporation (FDIC) that determine how nonfinancial companies can issue stablecoins.
• Ensure common regulatory oversight between foreign and domestic issuers.
• FinCEN ensures issuers have the knowledge and ability to counter things like money-laundering.

Payroll Tax, Compliance, and Employer Responsibilities

From a payroll perspective, stablecoins still come with many of the typical employer obligations. Wages paid in stablecoin are still considered taxable income, and employers must withhold the usual payroll taxes based on the fair market value of the payment in fiat currency at the time wages are issued.

Employers must also meet standard reporting requirements, including wage statements and year-end tax forms. This can introduce additional administrative complexity, as organizations must carefully track valuation timing, transaction records, and compliance across jurisdictions. On top of this, although stablecoins are designed to be more stable than other cryptocurrencies, they are still ultimately subject to fluctuations in valuation, which could potentially create additional administrative burdens.

The Future of Payroll is Stable

As a business, arguably your main priority is ensuring your business has the resources and employees it needs to ensure successful day-to-day operations. The amount of time and effort that goes into running a business day-to-day often doesn’t leave a lot of time to think about the future. Even still, if you only spend all your time focusing on getting your business through today, you may find yourself stuck in yesterday once tomorrow finally comes. Taking advantage of the latest and greatest in technology and being a pioneer in your field is the hope of every business owner, but it’s something that often feels easier said than done. With the power of stablecoin, however, you can ensure that your business is at the forefront of what technology has to offer, securing a better today and a brighter future.

Technology can provide your business with several different benefits—this includes opportunities to streamline your business’s payroll process. The right payroll software can help to elevate your business’s manual processes and transform the way you approach payroll. At Payday HCM, we’re committed to providing our clients not only with the latest in payroll technology but also with custom solutions that allow them to use the tools best suited to their business. Learn more about how Payday utilizes APIs and custom integrations to help streamline our clients’ payroll processes.