Stablecoins Are Becoming a Universal Payment Method, the Foundation Is Forming

The total value of all stablecoins in circulation exceeds $200 billion — a figure that is comparable to the gross domestic product (GDP) of New Zealand or Greece

The foundation is forming for stablecoins to become a universal payment method, Chris Colson, payments expert at the Federal Reserve Bank of Atlanta, wrote in a Monday (Jan. 13) blog post.

When I first heard about stablecoins, they were a niche tool for crypto traders seeking to avoid volatile price swings, Colson wrote. Today, stablecoins are moving into the mainstream and showing up in unexpected places like food delivery services, gas stations and retailers.

As examples of this trend, Colson pointed to retailers like Overstock, Chipotle, Whole Foods and GameStop accepting stablecoins; Stripe enabling merchants to accept USD Coin (USDC); Regal Cinema offering a 10% discount for USDC payments; Travala letting users book travel services with USDC or USDT; and Bitrefill enabling customers with gift cards purchased with stablecoins to shop at some merchants that don’t directly accept digital assets.

So why are businesses suddenly embracing stablecoins? They reduce transaction fees, settle almost immediately and attract crypto-savvy customers, helping businesses stay competitive in a digital-first world, Colson wrote.

The total value of all stablecoins in circulation exceeds $200 billion — a figure that is comparable to the gross domestic product (GDP) of New Zealand or Greece, he wrote.

While the future of stablecoins as a payment method is still unfolding and uncertain, these developments are helping to establish them as a payment method, Colson wrote.

Stablecoins are emerging as a powerful tool bridging the gap between traditional financial technology and the world of cryptocurrencies, PYMNTS reported in October. Their ability to offer the efficiency and transparency of blockchain technology while providing the familiarity and stability of fiat currencies is critical for integrating blockchain-based assets into mainstream financial systems.

For banks, stablecoins have emerged as a way to stand up the crypto and FinTech innovation their clients desire, FV Bank CEO Miles Paschini told PYMNTS in an interview posted Tuesday (Jan. 14).

This isn’t about replacing existing systems. It’s about providing an additional option, Paschini said. Where stablecoins offer superior benefits, customers will naturally gravitate toward them.

When Stripe began allowing its merchants to accept stablecoin payments for online transactions on its platform, it saw customers from more than 70 countries make purchases with that form of payment in the first 24 hours.