Stablecoins, cryptocurrencies tied to the US Dollar or some other benchmark, allow for the first killer app for crypto or blockchain set for rapid adaptation.
This is where Circle Internet comes in with its USDC stable coin. Cross border payments can now occur within seconds at a fraction of the cost of legacy wire transfers that take days to settle. Fiserv and others have come out with their own stablecoins and Visa/Mastercard have been experimenting with them-using Circle Internet in the process, to avoid being disrupted. To use bitcoin for this is more of an inconvenience and bitcoin is too volatile to accept as a form of payment. It has primarily just been a speculation tool or “store of value.” NFTs likewise were nothing more than another speculation instrument.
The problem with Circle is it has just gone public and has already risen sharply from a. $21 offering earlier this month, currently trading in the $200 range. I’d expect some sort of pullback but uncertain where or when.
Great insights on stablecoins as crypto’s killer app! Circle’s USDC is definitely leading the charge in revolutionizing cross-border payments with speed and low costs. The involvement of big players like Visa, Mastercard, and Fiserv signals massive potential for mainstream adoption. While Circle’s stock has surged post-IPO, the long-term network effects could make it a powerhouse. Exciting times ahead for stablecoins—definitely worth keeping an eye on!
While I get how this could be handy as an alternative to all the other ways we have to send money around, it seems like yet another option in an established, competitive business. How is that a killer app?
A merchant typically pays 1.5% to 4% per transaction in credit card fees, depending on the card type and processor. For example, on a $100 sale, the merchant might pay $1.50 to $4.00 in processing fees.
In contrast, USDC payments on efficient blockchains like Solana or Base can cost only a few cents per transaction—often less than $0.10. Even when using a payment processor like Stripe for USDC, the fee can be as low as 1.5%, and direct on-chain transactions can be even cheaper.
• Direct USDC payments can be over 90% cheaper than credit card processing for merchants, especially for larger transactions.
• Even when using a payment processor with USDC (like Stripe), the fee is at the low end of the credit card range, and merchants avoid foreign transaction and currency exchange fees for cross-border sales.
USDC and other stablecoins can bypass and disrupt Mastercard and Visa’s traditional payment networks, especially for merchants and large retailers. Here’s how and why:
• Stablecoin payments allow merchants to process transactions directly on blockchain networks without routing through Visa or Mastercard’s infrastructure. This eliminates traditional interchange fees (typically 1.5%–4%) and enables near-instant settlement, rather than the multi-day delays common with card payments.
• Major retailers like Walmart and Amazon are exploring issuing their own stablecoins to avoid Visa and Mastercard fees, potentially saving billions annually in interchange costs. For example, analysts estimate these two could save $14 billion per year by bypassing card networks.
• Crypto payment platforms (like Coinbase Payments) are already enabling merchants to accept USDC directly, mimicking the convenience of credit cards but at a fraction of the cost. This is particularly disruptive for cross-border payments, where card fees are highest and settlement is slowest.
• Visa and Mastercard are responding by integrating stablecoins into their own networks—for example, Visa now allows banks to settle obligations using USDC and is piloting stablecoin settlement directly on its rails. Mastercard is also partnering with stablecoin issuers to stay relevant.
• However, the consumer side is more complex: Credit cards offer credit, rewards, and fraud protection that stablecoins do not yet match, making consumer displacement slower. But for merchants, especially those with high volume or cross-border needs, stablecoins present a clear path to bypass the card giants.
All sounds like some advantages, but in terms of a percent or two. That doesn’t scream “killer app” to me, especially given the advantage MC and Visa have of near universality. Is everyone going to have to carry 10 card in order to have the right one for today’s store?
It wouldn’t be a card for each store. It would be a USDC account. And for a retailer,2-4% is a huge part of their profit margin. Even for just exchanging payment it is. But as I pointed out on another thread, I expect adaptation at retailers to be slower. Just because stablecoin is not going to be something consumers will be incentivized to rush to for payment. I was incorrectly under the impression the credit/debit days could be used to facilitate seamless conversion. It is not
Part of the fee that VISA/MC charges the merchant are the rewards that the customer gets, like miles. Yup, the merchant pays for the travel miles you get, that is not paid by VISA/MC. Will customers want to not have their rewards any longer?
Part of the fee that VISA/MC charges goes into fraud detection. Wondering how the “killer app” handles fraud detection and prevention.
