Stablecoin Basics

Stablecoins (e.g. USDC, USDT) are cryptocurrencies pegged to a fiat currency, typically the US dollar but sometimes other currencies (e.g. EURC is pegged to the Euro). They maintain this peg by holding a reserve of that fiat currency. By combining the stability of fiat with the speed and programmability of crypto, stablecoins have become an important tool in global payments.

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USDC

USDC is a stablecoin pegged to the US dollar. Circle is the issuer and maintains a reserve surplus of all USDC in circulation. These reserves are held by BlackRock and independently audited by Deloitte.

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USDT

USDT is the most widely used stablecoin by transaction volume. Tether is the issuer. USDT volume is primarily on Tron, a separate L1 blockchain from Ethereum.

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Why Stablecoins for Payouts

Traditional cross-border payments route through multiple correspondent banks, take 2-5 business days, and charge fees at each hop. Stablecoin transfers settle in seconds, cost fractions of a cent, and work 24/7 - including weekends and holidays. USDC and USDT also have deep liquidity across global currency pairs, making conversion to local currency straightforward (see Off-Ramping).

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L1s and L2s

Ethereum is the original layer-1 (L1) blockchain that USDC launched on. Over time, high gas fees and congestion led to layer-2 (L2) networks - blockchains built on top of Ethereum that batch transactions for lower cost. The primary L2 that Consul uses is Base, Coinbase’s L2. All USDC funds on Consul are held on Base.

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Gas Fees

Every blockchain transaction requires a small fee called gas, paid to the network to process the transaction. On Ethereum L1, gas can cost several dollars per transfer during peak congestion. On Base, gas fees are typically fractions of a cent - making it practical for high-volume payouts. Consul abstracts away gas fees for you, so you don’t need to worry about them.

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On-Ramping

On-ramping is the process of converting fiat currency into stablecoins. When you deposit USD or another fiat currency into your Consul balance, Consul converts those funds into USDC on Base. This happens automatically - you send fiat and your payout balance is credited in USDC. See Flow of Funds for deposit methods and timing.

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Off-Ramping

Once a recipient receives USDC, they can hold it, send it to others, or convert it to local currency. Conversion to fiat - called off-ramping - is available through exchanges, local payment providers, or directly through Consul. Recipients in any supported country can turn stablecoin payouts into spendable local currency.

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Next Steps