Stablecoins are positioning themselves as a direct challenger to traditional card networks for a share of the next $100 billion in U.S. payment revenue. While most spending still flows through card rails, dollar-linked tokens offer a compelling promise of lower fees and faster settlement for merchants, treasurers, and payment processors. If adoption grows under clear regulations, these digital tokens could fundamentally reshape how key payments are made.
Context and Outlook
The economic case is straightforward. Card networks typically charge fees of 2% to 5% per transaction, while stablecoin transfers can settle in minutes for a cost of under 1%. This significant gap is the core reason behind the push to move payment volume to token-based systems.
The public supply of stablecoins has exploded, growing from under $5 billion in 2019 to over $250 billion today. Some forecasts in the data set even project a $3 trillion market by 2030, provided regulatory clarity is achieved. For context, a stablecoin is a blockchain-based token designed to maintain a steady value, typically pegged one-to-one with the U.S. dollar through holdings of reserves or algorithmic mechanisms.
Implications, Responses and Risks
The implications are significant. Merchants adopting stablecoins could see reduced costs and faster access to funds, while corporate treasuries could manage liquidity more efficiently. As studies from Visa and others note, cross-border and remittance payments might bypass costly correspondent banks, potentially slashing fees and settlement times globally.
However, there are risks to consider. TD Economics warns that a large-scale shift of consumer bank deposits into tokens could reduce the deposit base for lenders, potentially leading to tighter credit conditions domestically. This redistribution of money would have knock-on effects for traditional banking.
Incumbents are not standing still. Visa is piloting same-day settlement using stablecoins like USD Coin, platforms like Coinbase Commerce enable online stores to accept them, and several large retailers are exploring branded tokens to encourage usage.
Significant risks remain, including potential fraud, the lack of deposit insurance, custody challenges, and the critical need for fully audited reserves. The collapse of TerraUSD in 2022 is a stark reminder that a stablecoin’s peg can break, and conflicting regulations across different countries add compliance complexity for global businesses.
The upcoming GENIUS Act represents the next major regulatory checkpoint. Its requirements for reserves and transparency will largely determine how much of the $100 billion in card fees eventually migrates to stablecoin rails. For now, merchants and treasurers should closely watch Visa’s pilots, monitor the growth in token supply, and await the final rules before making significant changes to their payment acceptance policies.
