Crypto can be used to move money across borders, settle faster, reach new customers, and tap into parts of the internet that run on blockchains. Stablecoins and altcoins support these goals in distinct ways. They’re fundamentally different but are commonly confused. For teams interested in crypto, it’s important to understand their uses, differences, and relation to one another.

Below, we’ll explain the differences between stablecoins and altcoins, and how to decide which one best fits your business needs.

What’s in this article?

• What qualifies as a stablecoin vs. altcoin?
  
• How are the prices of stablecoins and altcoins determined?
  
• What are the use cases for stablecoins and altcoins?
  
• What risks do stablecoins and altcoins have?
  
• How can businesses decide when to use a stablecoin vs. altcoin?
  
• How Stripe can help
  

What qualifies as a stablecoin vs. altcoin?

Stablecoins and altcoins are two types of crypto assets.

Altcoins (short for “alternative coins”) cover nearly everything that isn’t Bitcoin, including large, established assets like Ether and thousands of smaller tokens attached to specific platforms, applications, or communities. They made up about 44% of the global crypto market in 2025. The prices of certain altcoins rise and fall based on supply, demand, and sentiment. Some altcoins power entire blockchains. Others exist to fuel a specific service or governance system.

Stablecoins, in contrast, exist for the purpose of price stability. Many are pegged 1:1 to a major currency such as the US dollar or euro. That peg can be maintained a few different ways, but the goal is to keep the token trading at its target value. In 2025, stablecoins facilitated $46 trillion in gross transaction flows globally. Technically, stablecoins are a type of altcoin. The distinction is that a well-managed stablecoin should move only a fraction of a cent around its peg, while other types of altcoins can surge or crash.

How are the prices of stablecoins and altcoins determined?

Stablecoins and other altcoins operate under entirely different market dynamics. Here’s how different stablecoins maintain their prices:

• Fiat-pegged stablecoins: The issuer holds cash or cash equivalents for every token in circulation. This gives the coin a redeemable value and creates an arbitrage loop that pulls the price back towards the peg whenever it shifts.

• Crypto-pegged stablecoins: These keep their pegs by locking other cryptocurrencies in smart contracts as collateral. Because those assets can swing in value, these systems rely on overcollateralization and automated incentives that restore balance when prices drift.

• Algorithmic stablecoins: These try to maintain stability through supply adjustments instead of real collateral. These designs tend to fail under stress because they depend on market confidence rather than assets that can be redeemed.

Other altcoins don’t have any built-in stabilizers and trade entirely on market sentiment, liquidity, and project momentum. Even prices for large, well-known assets can rise or fall quickly. They behave much more like growth assets, with higher upside and higher variability that businesses need to actively manage. However, stablecoins are engineered to minimize price volatility so they can function as a practical medium of exchange.

What are the use cases for stablecoins and altcoins?

Stablecoins are built for day-to-day transactions, while other altcoins fuel emerging platforms. Here’s how their use cases differ in practice.

Stablecoin use cases

• Cross-border payments: Stablecoins give businesses a way to move money internationally within minutes at any time of day. The value holds steady during the transfer, which removes the foreign exchange risk that can slow down international payments.

• Treasury movement: Companies use stablecoins to shift funds between entities or platforms faster than traditional wire transfers allow, which improves access to working capital.

• Customer payments: Some businesses accept stablecoins at checkout. Providers like Stripe can automatically settle the transaction into a business’s bank account in its preferred currency.

• Hedge against inflation: In markets with unstable currencies, customers and small businesses lean on stablecoins. Holding a dollar-pegged token offers stability when a local currency’s purchasing power is unpredictable.

Altcoin use cases

• Access to blockchain platforms: Many altcoins are native to their own networks, and businesses need them to use the underlying technology (e.g., running smart contracts, paying transaction fees, interacting with decentralized apps).

• Environment-specific currencies: Some altcoins power gaming economies, creator platforms, decentralized storage networks, or membership communities, and companies need the associated token to engage meaningfully.

• Investment in emerging technology: Altcoins are frequently used as investments, especially by companies adjacent to crypto markets.

• Influence in decentralized systems: Certain altcoins provide voting rights in decentralized protocols. Companies that hold governance tokens can participate in governance decisions.

What risks do stablecoins and altcoins have?

Stablecoins and other altcoins come with different risk profiles. Here’s a closer look.

Stablecoins

• Peg slips: A stablecoin is only as strong as whatever backs it. If reserves lose value, the coin can slip below its peg. Even the pegs of well-run stablecoins can slip temporarily during a market panic. In May 2022, for example, the major stablecoin USDT dropped below its $1 peg, creating uncertainty in crypto markets.

• Regulatory pressure: Many countries are beginning to regulate stablecoins, and developing regulation dictates what assets must back stablecoins and who can issue them.

• Centralization exposure: Many stablecoins are run by centralized issuers that can freeze funds, while decentralized stablecoins can experience smart contract flaws or oracle failures.

• Security challenges: Crypto keys can be lost, wallets can be compromised, and transactions can’t be reversed. Businesses that adopt stablecoins need strong internal controls.

Altcoins

• High volatility: Altcoin prices can swing dramatically. Even established platforms experience price movements that are too large for many companies to tolerate on their balance sheets or in their operating funds.

• Project uncertainty: If the altcoin network loses users, gets hacked, faces technical setbacks, or fades into irrelevance, the token loses value alongside it. Many altcoins never achieve meaningful adoption.

• Regulatory ambiguity: Some altcoins might be treated as securities in your jurisdiction. A token that’s compliant today might not be tomorrow, which can affect liquidity and market access.

• Liquidity and market depth: Many altcoins trade thinly. Large transactions can move the market or become difficult to execute at a fair price, especially during periods of stress.

• Technical vulnerabilities: Smaller networks can face security issues from 51% (or majority) attacks to flaws in smart contract code. In 2025, Monero was the victim of a 51% attack. This shows how vulnerable crypto networks can be. A major technical failure can permanently damage an altcoin’s value.

How can businesses decide when to use a stablecoin vs. altcoin?

The decision whether to use a stablecoin or an altcoin comes down to your purpose, risk tolerance, and how deeply your business needs to interact with blockchain environments. Here’s a step-by-step framework to help you choose the best fit.

Start with the job to be done

If you need a reliable digital equivalent for cash, stablecoins are a good choice. If you’re building on a specific blockchain, need access to smart contract functionality, or want exposure to an emerging network, another altcoin might be suitable.

Consider your tolerance for price swings

Stablecoins minimize volatility so financial operations don’t come with unexpected gains or losses. Other altcoins move with the market, which works for companies that seek upside or exposure but doesn’t pair well with routine payments or treasury flows.

Check for compatibility

Look at what your partners, customers, or technical stack already support. A contractor abroad might use infrastructure meant for a dollar-pegged stablecoin. A decentralized application might require its native token. Choose what fits the environment.

Factor in regulatory and accounting realities

Stablecoins and altcoins face different types of regulation. How each asset is treated in terms of accounting, custody, and reporting can determine which is feasible.

Support your long-term strategy

Stablecoins can modernize financial operations and open up new regions; other altcoins can plug your business into emerging networks or user communities. The right asset supports where you’re trying to go.

How Stripe can help

Stripe Payments provides a unified, global payment solution that helps any business—from scaling startups to global enterprises—accept payments online, in person, and around the world. Businesses can accept stablecoin payments from almost anywhere in the world that settle as fiat in their Stripe balances.

Stripe Payments can help you:

• Optimize your checkout experience: Create a frictionless customer experience and save thousands of engineering hours with prebuilt payment UIs and access to 125+ payment methods, including stablecoins and crypto.

• Expand to new markets faster: Reach customers worldwide and reduce the complexity and cost of multicurrency management with cross-border payment options, available in 195 countries across 135+ currencies.

• Unify payments in person and online: Build a unified commerce experience across online and in-person channels to personalize interactions, reward loyalty, and grow revenue.

• Improve payment performance: Increase revenue with a range of customizable, easy-to-configure payment tools, including no-code fraud protection and advanced capabilities to improve authorization rates.

• Move faster with a flexible, reliable platform for growth: Build on a platform designed to scale with you, with 99.999% historical uptime and industry-leading reliability.

Learn more about how Stripe Payments can power your online and in-person payments, or get started today.