If you have looked into crypto payments at all, you have run into the word "stablecoin." Stripe and Coinbase Business build their merchant crypto payments around stablecoins, and for a store owner the reason is simple: a stablecoin is designed to be worth one dollar today, tomorrow and next month.
This guide explains what stablecoins are, how they are backed, what the new federal law changes, how a stablecoin payment works at your counter or online, and the risks no sales page will mention.
Key takeaways
- A stablecoin is a digital token designed to hold a fixed value, usually one US dollar, and to be redeemable for that amount.
- USDC, issued by Circle, is the stablecoin both Stripe and Coinbase Business accept. Circle says USDC is always redeemable one-to-one for US dollars, with reserves held mostly in a BlackRock-managed government money market fund.
- The GENIUS Act, signed July 18, 2025, requires approved issuers to hold at least $1 of permitted reserves for each $1 of stablecoins, and says payment stablecoins are not federally insured.
- Merchants can accept stablecoins through providers such as Stripe and Coinbase Business. Some settle in dollars and some leave you holding the stablecoin.
- Stablecoins remove most price swings, but not every risk. Refunds, record keeping, issuer risk and fees still need a plan.
What is a stablecoin?
A stablecoin is a cryptocurrency built to keep a steady value. Most are tied to the US dollar: one token is meant to equal one dollar. That makes them very different from bitcoin, whose price can move sharply in a day. TRM Labs reported that bitcoin fell 22% in the first quarter of 2026 alone.
Under US law, the GENIUS Act defines a payment stablecoin as a digital asset issued for payment or settlement that is redeemable at a fixed amount, such as $1, according to the Congressional Research Service.
How are stablecoins backed?
A dollar stablecoin is only as good as what stands behind it. The issuer holds reserves, cash and very safe short-term assets, and promises to swap tokens back for dollars.
Circle describes the reserves behind USDC this way on its transparency page:
- Most of the reserve is held in the Circle Reserve Fund, an SEC-registered government money market fund managed by BlackRock.
- The rest is held in cash, mostly at a handful of the world's largest banks.
- Reserves are held separately from Circle's operating funds.
- Holdings are disclosed weekly, and a Big Four accounting firm provides monthly third-party assurance that reserves exceed the USDC in circulation.
- Circle states that USDC is always redeemable one-to-one for US dollars.
Other stablecoins work differently, and not all publish the same detail. Before accepting any stablecoin, read its issuer's reserve and redemption information.
What does the GENIUS Act change?
The GENIUS Act (Public Law 119-27) was signed on July 18, 2025. The Congressional Research Service summarizes its main points:
| Area | What the law says |
|---|---|
| Who can issue | Approved banks, credit unions (through subsidiaries) and certain nonbanks, approved by a state or federal regulator |
| Reserves | At least $1 of permitted reserves for each $1 issued, such as cash, insured deposits and short-term Treasury bills |
| Disclosure | Published redemption procedures and periodic, examined reports on reserves |
| Insurance | Payment stablecoins are not federally insured |
| Interest | Issuers may not pay interest to holders |
| Insolvency | Stablecoin holders have priority over other claims against the issuer in bankruptcy |
Regulators still have to write the detailed rules. For a merchant, the takeaway is that regulated dollar stablecoins are becoming a mainstream payment tool, with clearer rules than before, but they are still not the same as money in an insured bank account.
How does a stablecoin payment work at checkout?
The flow is similar across providers:
- The customer chooses to pay with crypto. Online, it is a payment option at checkout. In store, the register or a payment link shows a QR code.
- The customer connects a wallet. They scan the code or connect a wallet app and pick the token and network, for example USDC on the Base or Ethereum network.
- The customer approves the payment. The wallet sends the stablecoin.
- The provider confirms it. Once the network confirms the transfer, the sale is marked paid.
- You get settled. Depending on the provider, you receive dollars in your account or you hold the stablecoin.
Two real examples from provider documentation:
- Stripe accepts USDC on several networks, including Ethereum, Solana, Polygon and Base, and settles completed payments in your Stripe balance in your local currency. Its pricing page lists 1.5% of the transaction amount. Stripe sets a customer limit of $10,000 per transaction, and refunds go back as stablecoins to the customer's original wallet.
- Coinbase Business accepts USDC through payment links, invoicing and checkouts. Coinbase says it is custodial and currently available to businesses with a legal entity in the US or Singapore. Its website notes that auto-conversion from USDC to USD carries a fee, and current payment fees are shown after you log in.
What are the risks of accepting stablecoins?
Stablecoins solve the price-swing problem. They do not solve everything.
- Issuer risk. A stablecoin depends on its issuer's reserves and operations. The GENIUS Act adds reserve rules, but payment stablecoins are not federally insured.
- Wrong network, lost funds. If a customer sends a token on a network your provider does not support, the payment can fail or be hard to recover. Accept only the tokens and networks your provider lists.
- Refunds go back in crypto. With Stripe, refunds return as stablecoins to the original wallet. Write a clear refund policy before you start.
- Fees on the way out. Converting stablecoins to dollars can cost a fee. Compare the full cost from customer payment to cash in your bank.
- Tax records still matter. The IRS lists stablecoins as digital assets, which it treats as property. Keep a record of the dollar value of each payment.
- Provider changes. Products change. Coinbase Commerce, for example, stopped creating new charges on March 31, 2026, when it was merged into Coinbase Business.
How crypto payments work in ShelfPerks
ShelfPerks has integrated Coinbase Business, Coinbase's payments product for companies. Here is how it works:
- Open a Coinbase Business account. Coinbase requires a registered business entity in the US or Singapore and a business bank account.
- Connect it to ShelfPerks. Once your Coinbase Business account is connected, crypto shows up at checkout as a payment option, just like cards and your other payment methods.
- Ring up the sale as usual. Your staff selects crypto as the payment method, the same way they would choose card or cash.
On the Coinbase side, according to Coinbase's developer documentation, each checkout is priced in dollars or USDC, the customer pays in USDC on the Base network, and the payment settles to your Coinbase Business account in USDC, with the fee shown on each payment. Full and partial refunds are supported. You can hold the USDC or withdraw to your bank, and Coinbase notes a fee for automatic conversion to dollars. Coinbase lists 1% pricing for merchants who moved over from Coinbase Commerce and shows current fees after you log in. ShelfPerks lists a payment provider integration fee of $20 per provider account, per location, per month.
Frequently asked questions
What is a stablecoin in simple terms?
A stablecoin is a digital token designed to stay worth a fixed amount, usually one US dollar. The issuer holds reserves such as cash and short-term Treasury bills so each token can be redeemed for a dollar.
Is USDC safe for a business to accept?
Circle says USDC is always redeemable one-to-one for US dollars, with most reserves in a BlackRock-managed government money market fund and monthly third-party assurance. It is still not federally insured, so many businesses convert stablecoins to dollars regularly.
What is the GENIUS Act?
The GENIUS Act, signed July 18, 2025, is the first US federal law for payment stablecoins. It requires approved issuers to hold at least $1 of permitted reserves per $1 issued, publish reserve reports and redemption procedures, and it bars issuers from paying interest to holders.
Do I have to hold crypto if I accept stablecoins?
Not always. Stripe settles stablecoin payments in your Stripe balance in local currency. Other providers, such as Coinbase Business, let you hold USDC or convert it to dollars for a fee.
Are stablecoin payments taxed?
Yes. The IRS treats digital assets, including stablecoins, as property, and businesses must record the US dollar fair market value of digital assets received as payment. Talk to an accountant before you start.
Your next step
Decide whether you want to receive dollars or hold stablecoins, then compare two providers on total cost. To run payments, reports and inventory in one system, try ShelfPerks with a 14-day free trial of Premium features, no credit card required, at grow.shelfperks.com.
