Stablecoins are well-suited as a payout medium for on-chain asset insurance due to their price stability, which minimizes volatility risks compared to other cryptocurrencies. Pegged to assets like fiat currencies, they ensure predictable claim settlements, enhancing trust and reliability in decentralized insurance protocols. Their integration with blockchain enables fast, transparent, and automated payouts via smart contracts, reducing administrative costs and delays. Additionally, stablecoins’ widespread adoption and liquidity facilitate seamless transactions across platforms. However, risks like depegging or regulatory scrutiny must be considered, though reputable stablecoins with strong backing mitigate these concerns. Thus, stablecoins offer a practical and efficient solution for on-chain insurance payouts.