Stablecoins vs volatile coins: how a merchant avoids price risk

A shop prices its goods in dollars or euros, but the customer sends a coin whose price changes every second. Between the moment the invoice is created and the moment you sell the coin, the price can move against you. This is the volatility risk, and there are three ways to handle it.

1. Hold the coin and accept the risk

If you believe in the asset or need it for your own operations, you can keep what you receive. Then your revenue is exposed to the market, and your accounting has to deal with it.

2. Sell it yourself

You receive the coin and sell it on an exchange. The risk is smaller but not zero: it exists during the time between receipt and sale, and you pay exchange fees and spread.

3. Convert at the moment of payment

A gateway can convert the incoming coin at the market rate and credit you in a stablecoin such as USDT. The dollar amount of the invoice is what lands on your balance. This is the model CryBit uses for all coins except USDT itself, which needs no conversion.

What a stablecoin does not protect

• The price of the customer coin before the payment is confirmed: the gateway fixes the rate for the invoice lifetime, so the invoice has an expiry.
• The risk that the stablecoin itself loses its peg. It is rare and small for the largest ones, but it is not zero.
• Currency risk between the dollar and your own currency if your costs are not in dollars.

For most merchants, converting at the moment of payment and holding a stablecoin balance is the simplest way to know exactly how much each order brought in.