# Why use a stablecoin in business finance?

Canonical page: https://finanzer.ai/learn/stablecoins-in-business-finance

> A stablecoin is a digital token designed to track a reference currency. In a financing arrangement, it can supply capital or carry a payment across a supported blockchain network.

A stablecoin is a digital token designed to track a reference currency. In a financing arrangement, it can supply capital or carry a payment across a supported blockchain network.

## Give the settlement asset a specific job.

A lender may supply stablecoin capital. A payment provider may use stablecoins between the funding account and the recipient. The borrower’s experience depends on the arrangement.

### Supply funding

An eligible provider commits capital under a lending mandate.

### Move funds

A supported network records the transfer between the approved destinations.

### Receive and repay

The facility defines recipient delivery, repayment currency and any conversion.

## Follow one financing arrangement.

The settlement asset is one part of the journey. Approval, delivery and repayment allocation need their own records.

[See Finanzer’s settlement design](https://finanzer.ai/platform/funding-and-settlement)

## Assess the entire route.

Network fees and confirmation are only part of the operation. A useful comparison includes conversion, custody, local delivery and reconciliation.

### Currency and conversion

Know which currency is owed and who bears exchange-rate changes and conversion costs.

### Issuer and custody

Understand the token’s reserve and redemption model, and who controls the assets.

### Delivery and exceptions

Distinguish blockchain confirmation from recipient delivery. Plan for failed transfers and unmatched receipts.

## Your questions, answered.

### Is a stablecoin the same as a bank deposit?

No. Its backing, redemption rights and protections depend on the issuer, asset and arrangement.

### Does a stablecoin generate the lending return?

The lending return comes from the credit agreement and the borrower’s repayment. Using a stablecoin to fund or settle does not create that return by itself.

### Does stablecoin settlement remove credit risk?

No. Borrower risk remains. Issuer, custody, network and conversion risks also need to be considered.

### How does FZR differ?

FZR is a proposed network asset for participation and voluntary risk allocation. It is not designed as a currency-pegged settlement asset.

## Work through the details with us.

Tell us about the financing, the participants and the records your process needs.

[Talk to our team](https://finanzer.ai/contact?topic=Platform%20discussion#enquiry)

[How Finanzer works](https://finanzer.ai/platform)