Stablecoins have been having their moment since late 2024 — people in payments, banking, and fintech, are very familiar with the technology, but many enterprise organizations are just starting to build their stablecoin strategies.
Never fear if you’re just getting started — stablecoins, infrastructure technology, and cross-border payments are a big problem to solve, but companies like Rail have been working on the solution for years. Consider this post is your entry point: no hype, no jargon, just a clear explanation of what stablecoins are, why they matter, and how they’re shaping the next wave of global payments infrastructure.
At their core, stablecoins are digital currencies designed to hold a stable value — typically pegged 1:1 to a fiat currency like the U.S. dollar. Unlike volatile cryptocurrencies such as Bitcoin or Ethereum, stablecoins aren’t meant for speculation. They’re designed for stability, utility, and speed.
The most commonly used stablecoins for payments are fully backed by fiat reserves, issued by regulated financial institutions, and redeemable for the underlying fiat currency. Think of them as a digital representation of dollars that moves at modern internet speed.
Most stablecoin transactions happen over public blockchains, which means they can be settled instantly, at any time of day, with full transparency. That makes them a powerful tool for improving how money moves globally.
Over the last year, stablecoins have moved from niche crypto circles into broader financial infrastructure conversations. There are a few big reasons why:
Add in rising global demand for faster, more transparent payment systems, and it’s no wonder stablecoins are gaining traction.
Cross-border payments are notoriously complex. They involve multiple banks, intermediaries, currencies, and compliance checks. The process is slow, opaque, and expensive.
Stablecoins simplify this. With blockchain rails, businesses can move value from point A to point B directly, without relying on legacy infrastructure like SWIFT or correspondent banks. Funds are transferred instantly, with full traceability and lower overhead.
This means:
Industry thought leaders have coined the term Stablecoin Sandwich: a simple framework for understanding how stablecoins can be most effectively used in a payments flow. What people mean when they talk about the Stablecoin Sandwich is:
Fiat in → Stablecoin rails → Fiat out
In this model, businesses continue to operate in fiat currencies (dollars, euros, etc.) at both ends of a transaction. Stablecoins are used in the middle — where they offer the most benefit.
Why use a sandwich model? Because while stablecoins are powerful for fast, cost-efficient movement, fiat still rules the endpoints. That’s where reporting, compliance, and day-to-day operations happen.
So instead of trying to replace traditional finance, stablecoins enhance it. They become the connective tissue between legacy systems and future-ready infrastructure.
The Stablecoin Sandwich may be the simplest way to understand how fiat + stablecoins work together, but there are so many more ways this technology can come to life in helping money move quickly (and more cheaply). Sometimes stablecoins will be in the center of the sandwich, sometimes they'll be a pay in or pay out, and most times you won't even know if your money hit stablecoin rails or not on the way from payer to payee — that's the beauty of great infrastructure.
Stablecoins aren’t just a new kind of money. They’re a new kind of infrastructure—one that can make global payments faster, cheaper, and more reliable.
But they don’t operate in a vacuum. The best results come when stablecoins are integrated thoughtfully into a broader system that includes fiat rails, regulatory standards, and enterprise-grade reliability.
That’s what we’re building at Rail. And if you’re exploring stablecoins as part of your payments strategy, we’re here to help.
✨ Want to learn more? Start with our 2025 Buyer's Guide to International Payments.
.svg)
.svg)
