Oct 21, 2025

What's at stake: Other fintechs are also targeting stablecoins for payroll, creating competition. Forward look: As the stablecoin market grows, issuers are looking for new uses for the digital asset. While it's rare for companies to pay staff in cryptocurrency, there are signs of burgeoning demand, which is drawing attention from fintechs. The Aleo Network Foundation and Paxos Labs have launched USAD, a dollar-backed stablecoin that is designed to combine smart contracts with privacy, which would keep participant identities and transaction amounts confidential. In another similar rollout, stablecoin platform Toku last week partnered with digital asset and wallet platform Utilia to support stablecoin payroll and treasury operations, calling payroll an opportunity to move stablecoins beyond being a "digital asset at rest." The companies are looking for new uses for stablecoins, which appear to be poised for dramatic growth, reaching $2 trillion in 2028, up nearly 10 times from its current level, according to Standard Chartered. The fintechs are also seeking early mover advantage as banks slowly warm to stablecoins, with less than 5% of banks currently issuing or piloting a stablecoin, according to . "As organizations modernize payroll infrastructure, stablecoins are emerging as powerful tools for faster, more global, cost-effective salary and other payment disbursements," Josh Hawkins, executive vice president of strategy and policy at Aleo told American Banker, saying stablecoin transfers are than traditional payment rails such as wire transfers, making them a good fit for payroll and other corporate disbursements. "Particularly for larger or frequent payroll operations, stablecoins can lead to significant cost savings over time." But there's a problem, Hawkins said, noting that when an employer pays in stablecoins, crypto wallet addresses are publicly visible on-chain, exposing salary information that is traditionally designed to be confidential. This causes several risks, including the possibility that crooks could follow transactions, which reveal a person's income flow, crypto holdings and other financial transactions and are linked to public addresses, Hawkins said, adding bad actors can also use blockchain analytics to triangulate wallet activity, potentially linking addresses back to the employer. "It's even possible to set automated alerts for transfers from known payroll wallets, flagging when and where funds move," Hawkins said. To counteract these risks, USAD uses Aleo's , which is technology that enables one side of a transaction to verify the other side without disclosing data. This combines with Paxos Labs' stablecoin infrastructure. "While there are people out there doing sketchy things in crypto, there are legitimate use cases for businesses to have privacy around on-chain transactions," Bhau Kotecha, co-founder at Paxos Labs, told American Banker. "If a business wants to send stablecoins, the amounts aren't visible but we do have controls in case there is a request to unveil that transaction." Is there demand for stablecoin paychecks? Receiving work compensation in cryptocurrency is a niche inside a niche, covering mostly crypto-native firms with geographically disbursed workers. "While there are use cases where stablecoins will and do play a role, it doesn't mean that they are the right payment method for every use case," Gareth Lodge, a senior analyst at Celent, told American Banker. But that stablecoin paycheck niche is getting larger. About 10% of workers in crypto or related industries received their salary in cryptocurrency in 2024, up from 4% in 2023, according to data released in August. Pantera also noted an increase in the companies in its report, with respondents growing from less than 600 in 2022 to 1,600 in 2024. Ninety percent of the recipients received those salaries in stablecoins, according to Pantera. There are also uses for privacy in business stablecoin payments beyond payroll, according to Paxos. "A vendor may want the ease of paying with a stablecoin, but may also want it to be private so the details aren't out in the open," Kotecha said. Privacy is essential if stablecoins are going to be widely used for something like payroll, said James Wester, director of cryptocurrency and co-head of payments at Javelin Strategy & Research. "No one wants their salary visible on a public ledger. But privacy in payments remains a double-edged sword," Wester said. "The same features that protect individuals might obscure illicit activity. That remains a hot topic and an easy attack vector for critics of crypto and digital assets. The real challenge then isn't the technology but showing that privacy and compliance can coexist." While the ability to receive funds privately is valuable, it is limited, Tony DeSanctis, senior director at Cornerstone Advisors, told American Banker, noting that Bank Secrecy Act and anti-money-laundering rules are still in effect. "A specific example of the opportunity is that people cannot see the transaction of my paycheck going into my wallet from my employer." Paxos is regulated and the USAD partners have compliance controls that vet users for know-your-customer and other regulations, Kotecha said.