Stablecoins vs Bitcoin vs Ethereum for Payments: Which Works Best?

Cryptocurrencies have changed how we think, travel, and use digital money. Popular cryptocurrencies include Bitcoin, Ethereum, and stablecoins. Each cryptocurrency serves a different purpose. Ethereum runs various decentralised apps, Bitcoin stores value, and stablecoins are becoming more useful for ordinary purchases and international transactions because they don't lose value.

Stable, rapid, and cheap stablecoins should be considered by individuals and businesses when choosing them over Bitcoin or Ethereum for payments. Let's examine how each asset works in payment systems and determine which cryptocurrency may be ideal for future payments.

What are stablecoins?

Stablecoins are digital currencies that are linked to real-world assets such that their value stays the same. Stablecoins that are backed by real money, like the US dollar, are the most frequent form. Some people could find cryptocurrencies, gold, or even algorithmic systems that discover a balance between supply and demand helpful.

They are appealing since they don't have the ups and downs that come with using Bitcoin for payments. Stablecoins are useful for businesses and customers who need prices that stay the same, like Bitcoin and Ethereum do.

There are a lot of stablecoins that are tied to the US dollar, which illustrates how strong this trend is. By the end of 2025, their whole market capitalisation, which was around 7% of the global cryptocurrency market, had grown to $225 billion. J.P. Morgan Global Research experts estimate that the amount will climb to $500–750 billion in the next several years, illustrating how important they are becoming in global finance.

Different kinds of Stablecoins

There are many ways to maintain things stable, even though it's a simple idea:

Most stablecoins are backed by real money. Regulated institutions have reserves that back tokens like USDC and USDT at a rate of 1:1.
Stablecoins like DAI that are backed by cryptocurrencies are founded on collateralized cryptocurrency assets, which are often overcollateralized to keep their value steady.
Algorithmic Stablecoins employ algorithms to keep the supply consistent; however, failures like TerraUSD in 2022 exposed how fragile they are.
Backed by Goods, Stablecoins don't function for everyday payments. Instead, they connect their worth to gold or silver and operate in specialised financial markets.

This sort of stablecoin is still the most popular for online shopping and payments, even if there are several types that users can choose from.

The Benefits of Using Stablecoins to Make Payments

Stablecoins are quickly becoming the ideal option to use cryptocurrency for payments because they have a lot of unique benefits. They are reliable because they are backed by real money, and they work because they employ blockchain technology.

Stablecoins solve the problem of fluctuating exchange rates. Merchants may set prices for their items without worrying about things changing at the last minute.
Transfers at a Low Cost: The fees are substantially cheaper than those for credit cards or bank wire transfers. Even though it generally costs 6% or more, you can send money for a lot less.
Faster Settlement: Payments are made in seconds or minutes instead of days, like they are with traditional banks.
They are open all the time and don't depend on bank hours.
Smart contracts can be used together because they can be set up to handle things like subscriptions, automatic payments, and financial services.

There are a few reasons why the volume of stablecoins is already higher than that of Bitcoin and Ethereum. There were $869 billion worth of transactions with stablecoins in the first quarter of 2021. This was more than Ethereum ($840 billion) and Bitcoin ($623 billion).

Also read: Will Stablecoins Replace Bank Wires? An Outlook for the Next 5 Years

Bitcoin for Payments: Pros and Cons

In 2009, Bitcoin was the first decentralised cryptocurrency to be released. At first, it was only a mechanism for people to pay each other. Now, though, most people think of it as digital gold, a way to protect against inflation, and a way to keep value.

The price of Bitcoin on the market has almost doubled by 2025, hitting $1.34 trillion. But it's hard to pay for things every day because it's so unreliable. The price of a cup of coffee you buy with Bitcoin may alter before the transaction is even concluded.

The costs of using Bitcoin have also altered. In 2025, the average charge was $1.74, but it could go up to $9.81 when the network was overloaded. The Lightning Network is Bitcoin's Layer 2 scaling solution. It makes microtransactions easier to perform with nearly no cost (less than $0.001) and a speed of over 1,200 TPS. This is a lot better than Bitcoin's foundation layer, which can only handle 7 TPS.

Even after these adjustments, Bitcoin payments are still not particularly effective for everyday purchases because they are unstable and can't be utilized for big purchases.

Ethereum for Payments: Strengths and Weaknesses

Ethereum came out in 2015 and incorporated smart contracts, which made blockchain technology usable for more than just sending money. It has been the basis for a lot of new things since then, like NFTs and decentralised finance (DeFi).

Ethereum's daily transaction volume in the first quarter of 2025 was over $17.2 billion, which was greater than Bitcoin's for the fourth quarter in a row. This shows how well it works to send money.

For a long time, petrol fees have been a huge impediment to Ethereum payments. But by 2025, the average charge had gone down to just $0.38 since Layer 2 scaling solutions had become more popular. These L2s now handle 63% of transactions, which has made them work better.

In 2025, Ethereum's Layer 1 and Layer 2 could handle 41 TPS, and it only took 5.4 minutes for transactions to conclude. Ethereum is better for payments than Bitcoin, but its price changes too much to be utilised for everyday transactions.

Crypto Payments Comparison: Stablecoins, Bitcoin, Ethereum

When it comes to using cryptocurrencies to pay for things internationally or for business, stablecoins are definitely the greatest option.

Instead of using Bitcoin to buy stuff, people should think of it as an investment or a tool to protect themselves against inflation.
Ethereum lets you program your money, but it is still slower and more unstable than stablecoins.
Stablecoins are the greatest sort of cryptocurrency for business payments and e-commerce adoption because they combine the stability of fiat with the speed of blockchain.

Stablecoins are the greatest option for merchants to get paid and for international settlements right now. Bitcoin and Ethereum are still the most essential portions of the crypto economy, though.

Also read: Stablecoins make cross-border payments faster, cheaper, and smarter

Regulation and Adoption

More and more people in charge are learning about stablecoins. The GENIUS Act, which passed in the US in July 2025, made it illegal for stablecoin issuers to not retain 1:1 reserves and to not follow licensing standards. This decision has made the U.S. dollar even more important in international trade and proved that it is a reliable member of the financial system.

Stablecoin payment rails are increasingly becoming popular with businesses, especially for international trading. Stablecoins make things more efficient in both B2B and retail contexts by allowing settlements that used to take days through SWIFT to happen immediately.

The Role of TransFi

Companies that wish to add stablecoins or cryptocurrencies to their online shopfronts can use services like TransFi to gain the infrastructure they need to make international transactions go smoothly. Enterprise-grade APIs can help companies save money, deal with settlement risks, and get ready for the future of digital payments.

Conclusion

Debates about stablecoins vs. Ethereum and Bitcoin for payments show the pros and cons of each asset. Ethereum powers cutting-edge systems, while Bitcoin is a hedge and investment. However, neither currency is reliable enough for daily commerce. However, stablecoins are best for daily payments and commercial agreements because they are stable, cheap, and global.

Bitcoin and Ethereum will remain vital to the crypto economy, but in different ways. As regulations tighten and technology improves, stablecoins may become the most common payment method. TransFi provides the platform to effortlessly incorporate stablecoin payments into global commerce for businesses.

FAQs:

1. What makes stablecoins better than Bitcoin for payments?

Stablecoins don't go up and down as Bitcoin does, thus it's hard to use them in everyday life. This is because they are based on the US dollar and other things.

2. Can you use Bitcoin to pay for things every day?

Not at all. The Lightning Network makes it easier to use, but Bitcoin's price changes and slower base-layer speeds make it less suitable for tiny transfers.

3. How do Ethereum petrol fees change the way payments work?

Layer 2 scaling has seen petrol prices drop considerably, reaching roughly $0.38 in 2025. This makes it easier to use Ethereum for transactions than it used to be.

4. What is the best cryptocurrency for businesses to utilise to pay for things?

Stablecoins are the greatest choice right now since they are stable, work well, and are getting increasing support from authorities.

5. Can you use stablecoins instead of other ways to pay?

They aren't a full substitute yet, but they are already making international transactions faster and cheaper, and they are swiftly becoming more popular.

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