A crypto payment occurs when financial value is sent via a blockchain protocol. The blockchain is the settlement rail on which the value flows. Learn more.
The internet has made many technologies and processes more efficient: You can stream a movie instantly or send a message across the world in seconds, yet the way money moves today feels strangely outdated. While there are many domestic real-time payment systems today, many still rely on bank-to-bank transfers, which can take anywhere from a few hours to several days. And moving money internationally still takes days, piles on fees, and routes through a maze of financial intermediaries.
This outdated infrastructure for money movement is part of a system known as traditional finance, or TradFi, a long-established financial system that relies on centralized institutions (like banks) to manage money and other assets. Part of what makes TradFi infrastructure feel so outdated is its dependence on intermediaries: For Alice to send a payment to Bob, money often has to be routed through multiple intermediaries, each adding more complexity, time, and fees to the transaction. In other words, the power and efficiency of the internet has — for the most part — yet to streamline money movement and payments.
With recent technological developments, there’s a path to make payments near-instant, global, and programmable (i.e., capable of being automated and customized with code). Reducing the inefficiencies of TradFi money movement begins with blockchain technology and cryptocurrency. These technologies enable fast and efficient payments that can reduce the overhead traditionally involved in payments.
For many people thinking of crypto payments, the phrase “paying with Bitcoin” comes to mind. Yes, you can send bitcoin (BTC) from one person to another to pay for goods or services, but today crypto payments are more broad, flexible, and powerful than that. Crypto payments represent a new layer of global financial infrastructure, built on open blockchain networks. Crypto payments essentially allow value to move as easily as information does today. Whether you’re sending bitcoin (BTC), ether (ETH), or stablecoins, crypto payment rails reduce payment complexity while removing value-taking intermediaries.
In this breakdown, you’ll learn what it really means to send or accept crypto payments on blockchain rails, how volatile cryptocurrencies and stablecoins differ, and why institutions are increasingly adopting crypto payment technologies.
The limitations of traditional payment systems
Before diving in, it’s worth understanding what crypto payments were designed to fix. Most cross-border payments today depend on legacy infrastructure like SWIFT or ACH, systems originally designed in the 1970s.
These networks rely on layers of correspondent banks, clearing houses, and settlement agents. Each layer adds time and fees to the transaction. International payments can take days to settle. And sending $200 internationally incurs an average fee of over 6%.
Even newer real-time payment (RTP) systems are often limited to domestic use. They don’t interconnect globally, which results in increased transaction friction, high fees, and limited transparency, as most RTP money movement occurs in closed systems where fees, transaction protocols, and visibility are artificially controlled by a centralized entity.
The internet radically transformed and democratized how information is shared around the world; now blockchain, pioneered by Bitcoin, stands to do the same, modernizing and streamlining global finance in the 21st century.
From Bitcoin to broader crypto payment infrastructure
Today’s crypto payments infrastructure emerged from Bitcoin’s original vision: a peer-to-peer (P2P) electronic cash system. Bitcoin made it possible for two parties to send value directly, without intermediaries, using a shared, public ledger: the Bitcoin blockchain.
Bitcoin is now a trillion-dollar asset class and financial powerhouse in its own right. There are Bitcoin exchange-traded funds (ETFs), industrial-scale BTC mining operations, BTC corporate treasuries, and more.
After Bitcoin came other blockchains and their associated cryptocurrencies: Ethereum, Avalanche, Solana, and thousands more. Many of these post-Bitcoin blockchains feature use case-specific designs — some are designed for high-speed transactions, others prioritize advanced security, and so on — but mostly all of them share these key characteristics in common:
- Decentralized: Not dependent on a central authority to facilitate its operation.
- Globally accessible: Most anyone with an internet connection and crypto wallet can participate.
- Permissionless: No need for a bank account to send or receive value.
- Transparent: Transactions are recorded and visible on public blockchains.
These characteristics stand in stark contrast to legacy payment methods. Blockchain for payments changed the digital transaction narrative by opening up new methods and possibilities for sending and receiving value.
Overcoming early crypto payment challenges
Early crypto payments faced several roadblocks on their path to mainstream adoption. Price volatility made payments unpredictable, while transaction fees often spiked during periods of network congestion on blockchains like Bitcoin and Ethereum. For institutions bound by strict compliance rules, open networks also raised questions around Anti-Money Laundering (AML), Know-Your-Business/Customer (KYB/KYC) requirements, and other regulatory obligations. Although crypto payments offered speed and transparency, these limitations made them difficult to use in practice — especially for businesses operating at scale.
Another major challenge was liquidity. In the early days, moving between crypto and fiat rails was cumbersome and expensive. Businesses often faced delays and high costs when converting digital assets to local currencies, creating operational friction that offset many of the theoretical benefits of blockchain settlement. Stablecoins like USDC1 have since transformed this dynamic by providing efficient, low-cost onramps and offramps that bridge traditional finance and onchain value. This liquidity improvement has been a defining milestone for crypto payments.
Even with better liquidity, scalability remained a critical bottleneck. Early blockchains simply couldn’t process transactions at the volume or speed required for enterprise-grade payments. Throughput was measured in tens of transactions per second — a small fraction of what traditional payment systems handle. Over the past few years, however, new high-performance networks such as Solana, and now Arc,2 have overcome these technical barriers. These chains are capable of supporting high-frequency, low-latency transactions at a global scale, matching the performance and reliability expectations of institutional finance.
Together, advances in liquidity, scalability, and compliance have reshaped the crypto payments landscape. With regulatory clarity emerging, digital assets pegged to fiat currencies designed to reduce volatility, and blockchains engineered for institutional-grade throughput, the once-theoretical promise of crypto payments is now becoming practical reality. These breakthroughs are setting the foundation to bring this next-generation infrastructure into regulated, enterprise-ready financial ecosystems.
What are crypto payments?
So, what is a crypto payment, technically speaking?
A crypto payment occurs when an individual or entity sends financial value via a blockchain protocol. The blockchain is the settlement rail on which the value flows. The medium of value transfer can be the native asset of a blockchain or any compatible token.
For example, you can send ETH, the native asset of the Ethereum blockchain, or one of thousands of tokens built on Ethereum, including stablecoins, like USDC.
How to make crypto payments
To send a crypto payment, you first need a crypto wallet. Often a program or app downloaded to your phone or computer (or otherwise a specialized physical device), crypto wallets are digital tools that allow you to interact with blockchain networks, including sending and receiving crypto transactions. Crypto wallets come in various types, optimized for various use cases and preferences: convenience, security, usability, and mobility.
Once you have a crypto wallet, all you need is an internet connection and digital assets to send. You also may need digital assets to pay transaction fees. For example, when you send crypto via Ethereum, you pay a blockchain processing fee denominated in ETH.
Digital assets like BTC, ETH, and stablecoins like USDC can be purchased in a number of ways, most commonly via a crypto exchange.
Now here’s a high-level overview of how sending crypto via blockchain payment rails works:
- Initiation: You use a wallet — the software that stores your digital assets — to begin the transaction. This could be a consumer crypto wallet, a business platform, or an institutional crypto payment processor. You indicate the recipient, the asset to send, and the quantity you’ll send when submitting the transaction to the network. (You may also need to configure network fees or other settings as applicable.)
- Sending: Once the transaction details are set, the wallet cryptographically signs the transaction using your private key. This digital signature verifies that you’re the rightful owner of the funds and authorizes the payment. After signing, the transaction is ready to be broadcast to the blockchain network.
- Transmission: The payment is broadcasted to the blockchain network, where independent network participants, or nodes, must verify its validity (by checking balances, digital signatures, and compliance with network rules).
- Confirmation: Once verified, the transaction is recorded publicly and immutably on the blockchain. Depending on the network, transaction confirmation can be near-instant, or take several seconds or minutes.
- Settlement: The recipient should see funds arrive in their wallet shortly after the transaction is confirmed. Remember that once a crypto payment is confirmed on a blockchain, settlement is final and irreversible.
Crypto payments vs traditional payments
Unlike traditional payment rails (e.g., cards, ACH, wires, and remittance networks), blockchain settlement happens peer-to-peer on a shared ledger. There are no acquirers, correspondent banks, or processors batching funds for days; once a transaction reaches network finality, settlement is complete. Many traditional systems permit reversals or chargebacks and route through multiple intermediaries with cut-off times and reconciliation steps. Onchain transfers instead settle continuously, with status and fees transparently visible on the network.
Put simply: crypto payments are code-enforced and globally interoperable; traditional payments are institution-mediated and rely on operational trust within closed networks. Some traditional rails now offer faster payments, but settlement typically remains dependent on intermediaries and post-transaction reconciliation.
The rise of stablecoin-powered crypto payments
Early crypto payment adoption was consumer-led. Today, with the rise of enterprise-grade wallets and infrastructure, businesses and institutions are increasingly adopting crypto payment gateways designed to meet compliance, treasury, and reporting needs. A major breakthrough in crypto payments came with stablecoins. These digital assets are designed to maintain a stable value, usually pegged to a fiat currency like the US dollar or euro.
Driven by numerous popular use cases, the collective stablecoin market cap has surged from less than $5 billion at the start of 2020 to over $300 billion in October 2025.
Stablecoins like USDC and EURC 3combine the speed and programmability of crypto with the predictability businesses need. USDC and EURC are fully backed by highly liquid fiat reserves held separately from Circle’s operating funds at leading financial institutions for the benefit of our stablecoin holders.
It’s worth noting that not all stablecoins are created, or backed, equally. USD-pegged stablecoins come in crypto-backed, fiat-backed, commodity-backed, and algorithmic varieties. Due to their history of predictability and transparency, fiat-backed versions dominate the stablecoin market. As of December 1, 2025, nearly 95% of the entire stablecoin market is fiat-backed.
Advantages of stablecoins in crypto payments
Stablecoins make blockchain payment processing practical. You get blockchain efficiency without the price volatility of traditional cryptocurrencies. Circle’s USDC alone has settled more than $48 trillion in lifetime onchain volume as of December, 2025.
Importantly, much of the demand for dollar-backed stablecoins comes from outside the US. In regions where access to dollars is expensive, slow, or restricted, options like USDC offer a faster and more efficient alternative — especially for international trade and remittances.
Stablecoins effectively bridge the gap between TradFi and crypto payments, providing a monetary foundation for commerce, payroll, remittances, business-to-business (B2B) transactions, and more.
Why enterprises are exploring crypto payment solutions
For enterprises, the rationale for experimenting with crypto payment rails is growing stronger. Businesses are rightly frustrated with:
- Settlement delays that tie up working capital for days.
- Unpredictable payment windows that complicate treasury operations.
- High fees that erode margins, especially for cross-border transactions.
Crypto payment processors and gateways are solving these problems by offering near-instant settlement, programmable cash flow, and global reach. Companies like Circle are offering powerful add-on infrastructure and solutions that abstract away complexity, business negotiations, and more.
Enterprises are also exploring how programmability — the ability to embed rules directly into money — can transform their financial operations. Imagine payments that automatically split, reconcile, or trigger follow-on actions without manual intervention. That’s blockchain for payments at work.
Different blockchain models — public, private, hybrid, and permissioned — allow institutions to balance transparency with compliance needs. Arc, for example, is a new, public, Layer-1 blockchain that offers opt-in, configurable privacy tooling to help businesses and users meet compliance obligations.
Programmability, compliance, and stablecoin-native design
These characteristics define the new era of crypto payments:
- Programmability: Digital assets can move according to programmable logic. This unlocks new use cases like automated escrow, conditional payouts, and more.
- Compliance: Blockchain payment processing systems can integrate AML, KYC, and transaction screening directly into payment flows, creating trust at scale.
- Stablecoin-native design: By using assets designed to maintain a stable value, like USDC or EURC, payments remain predictable while operating on open and interoperable networks.
This trio — programmability, compliance, and predictability — is transforming how institutions think about payments infrastructure.
Circle Payments Network (CPN): An easy entry point to crypto payments
At the institutional level, implementing crypto payments at scale requires more than just blockchain access. It requires a network designed for compliance, interoperability, and trust.
Circle Payments Network3 (CPN) is a global network of partners, including banks, payment service providers (PSPs), virtual asset service providers (VASPs), and enterprises, who enable consumer, business, and institutional payments with 24/7 real-time settlement via stablecoins like USDC and EURC. It brings the power of crypto payments into the regulated financial world.
The very first CPN transaction was cross-border and took under two minutes. Compare that with traditional methods that can take several days. For end users, both businesses and individuals, the benefits are substantial: lower costs, faster settlements, and increased transparency.
Financial institutions looking to integrate crypto payments can replace months (and potentially years) of work with CPN’s standardized infrastructure that enables compliant transactions. If you’re interested in joining CPN, visit the CPN website to learn more and submit the interest form to join the network.
Treating cash flow like software
Crypto payments are no longer an experiment. Driven by programmability, compliance, and efficiency, they’re becoming a new standard for global value exchange. The next era of payments will be defined by teams and companies who treat domestic and international cash flows like software — automated, transparent, and open to innovation.
For retail users, stablecoins like USDC and EURC bring speed and transparency to commerce and remittances akin to an email-replace-mail solution for financial transactions. For institutions, networks like CPN unlock a new layer of global liquidity where stablecoins move at internet speed. This saves not only on the transaction costs themselves but also on the hidden costs of idle capital.
As global finance continues to evolve, crypto payments mark the bridge between the legacy systems of yesterday and the programmable money of tomorrow. They aren’t just making transactions faster — they’re redefining what’s possible when value moves at the speed of information. The institutions that embrace this shift early will set the pace for the next era of financial innovation.
Those interested in joining the network can learn more in our guide and request to join through the official CPN webpage.
1 USDC is issued by regulated entities of Circle. See a list of Circle’s regulatory authorizations for more information.
2 Arc testnet is offered by Circle Technology Services, LLC (“CTS”). CTS is a software provider and does not provide regulated financial or advisory services. You are solely responsible for services you provide to users, including obtaining any necessary licenses or approvals and otherwise complying with applicable laws.
Arc has not been reviewed or approved by the New York State Department of Financial Services.
The product features described in these materials are for informational purposes only. All product features may be modified, delayed, or cancelled without prior notice, at any time and at the sole discretion of Circle Technology Services, LLC. Nothing herein constitutes a commitment, warranty, guarantee or investment advice.
3 EURC is issued by regulated entities of Circle. See a list of Circle’s regulatory authorizations for more information.
4 Circle Technology Services, LLC (CTS) is the operator of Circle Payments Network (CPN) and offers products and services to financial institutions that participate in CPN to facilitate their CPN access and integration. CPN connects participating financial institutions around the world, with CTS serving as the technology service provider to participating financial institutions. While CTS does not hold funds or manage accounts on behalf of customers, we enable the global ecosystem of participating financial institutions to connect directly with each other, communicate securely, and settle directly with each other. CTS is not a party to transactions between participating financial institutions facilitated by CPN who use CPN to execute transactions at their own risk. Use of CPN is subject to the CPN Rules and the CPN Participation Agreement between CTS and a participating financial institution.
