Stablecoin Payments Glossary
Fiat Conversion
Fiat conversion is the exchange of a stablecoin or other digital asset for sovereign currency, or the exchange of sovereign currency for a digital asset.
Explanation
Conversion can take place through an exchange, payment provider, broker, bank, or other liquidity venue. The final amount depends on the quoted price, fees, market depth, settlement method, and any foreign-exchange conversion between currencies. In merchant payments, fiat conversion can occur before the customer pays, during processing, or when the merchant receives settlement.
Why it matters
Conversion costs and liquidity can determine the practical economics of a stablecoin payment even when the blockchain transfer fee is low.
Example
A merchant processor can receive USDC and sell it for dollars before sending the merchant a bank settlement.
Related terms
Last reviewed: September 2026