Stablecoins as a Disruptive Force in U.S. Credit Card Payments: Assessing the Threat and Opportunity for Investors

The U.S. payments landscape is at a pivotal inflection point. Credit card swipe fees, which hit a record $187.2 billion in 2024, have become a political and economic flashpoint, driving inflation and eroding merchant margins [4]. Meanwhile, stablecoins—digital tokens pegged to fiat currencies—are surging in adoption, with U.S. dollar-pegged stablecoins processing over $27 trillion in transactions annually by 2025 [1]. For investors, this dual trend presents a stark choice: bet on the entrenched dominance of traditional payment networks like Visa and Mastercard, or position for a seismic shift toward crypto-native infrastructure.

The Cost Crisis in Traditional Payments

Credit card processing fees have long been a pain point for merchants. In 2025, the average fee for Visa and Mastercard transactions reached 2.35%, up from 2.26% in 2023 [1]. These fees, which include interchange, assessment, and processor markups, now rank second only to labor as a cost for businesses [5]. The Merchants Payments Coalition and allies have pushed for legislative reforms like the Credit Card Competition Act, which aims to introduce competition and reduce fees [3]. However, progress has been slow, and the status quo remains: businesses passed $187.2 billion in costs to consumers in 2024 alone, directly fueling inflation [4].

This environment has created fertile ground for disruption. Stablecoins, with their near-zero transaction costs and instant settlement capabilities, offer a compelling alternative. For example, startups like 1Money claim to process stablecoin transactions in under one second, with fees as low as 0.1% [5]. In a world where credit card fees routinely exceed 2%, such efficiency is not just attractive—it’s revolutionary.

Regulatory Clarity Fuels Stablecoin Growth

The U.S. regulatory landscape has shifted dramatically in 2025. The passage of the GENIUS Act in July 2025 provided a federal framework for payment stablecoins, mandating 1:1 reserve backing with U.S. dollars and short-term Treasuries while excluding non-bank entities from issuance [5]. This clarity has spurred institutional adoption, with major banks like JPMorgan and Société Générale launching their own stablecoins [5]. The act also removed regulatory overlap with the SEC and CFTC, classifying stablecoins as neither securities nor commodities [5].

Globally, similar momentum is building. The EU’s MiCA framework, which took effect in 2025, has pushed stablecoins into regulated finance, prompting platforms like Binance to prioritize compliant tokens like USDC [6]. These developments have transformed stablecoins from speculative assets into legitimate infrastructure, attracting $250 billion in circulation for major tokens like USDC and USDT [1].

Strategic Responses from Traditional Payment Networks

Visa and Mastercard are not standing idly by. Both companies have integrated stablecoin capabilities into their platforms, recognizing their potential in cross-border and B2B transactions. Visa processed $225 million in stablecoin settlements in 2025, projecting $1 billion in the next 18 months [3]. Mastercard has partnered with Kraken and Paxos to enable stablecoin settlements, positioning itself as a bridge between fiat and crypto ecosystems [4].

However, these moves reflect a defensive posture. Traditional networks still dominate consumer-facing payments, where stablecoins lack features like fraud protection and chargeback mechanisms [5]. For now, Visa and Mastercard view stablecoins as complementary tools rather than existential threats. Yet their investments signal a broader industry shift: legacy players are adapting to crypto infrastructure rather than resisting it.

Investment Opportunities and Risks

For investors, the key question is whether to bet on the evolution of traditional networks or the rise of crypto-native infrastructure. Stablecoin adoption is accelerating, with 86% of firms reporting infrastructure readiness for stablecoin integration in 2025 [1]. Institutional allocations are also shifting: 84% of institutions either use stablecoins or plan to, driven by their utility in cross-border payments and yield generation [4].

However, risks remain. Stablecoins still process less than 1% of global money flows, and challenges like de-pegging risks and lack of FDIC insurance persist [5]. Regulatory shifts could also disrupt momentum—though the GENIUS Act and MiCA have provided clarity, future policies may introduce friction.

The Inflection Point

The convergence of rising swipe fees, regulatory clarity, and stablecoin adoption has created a perfect storm for disruption. By 2030, stablecoin transaction volumes could surpass traditional payment networks, reshaping the financial landscape [2]. For investors, the time to act is now:

1. Traditional Payment Networks: Companies like Visa and Mastercard are adapting but face margin pressures as stablecoins erode their fee-based models. Investors should monitor their crypto integrations and ability to innovate.
2. Crypto Infrastructure: Startups building stablecoin rails (e.g., 1Money, Fireblocks) and regulated stablecoin issuers (e.g., Circle, Paxos) are prime candidates for growth. Institutional allocations to stablecoin yield strategies also present opportunities.

The next decade will redefine how money moves. For investors, the choice is clear: align with the future of payments or risk being left behind.

Source:
[1] The stable-door opens: How tokenized cash enables next-gen payments [https://www.mckinsey.com/industries/financial-services/our-insights/the-stable-door-opens-how-tokenized-cash-enables-next-gen-payments]
[2] The 2025 Global Crypto Adoption Index [https://www.chainalysis.com/blog/2025-global-crypto-adoption-index/]
[3] The GENIUS Act of 2025 Stablecoin Legislation Adopted in the US [https://www.lw.com/en/insights/the-genius-act-of-2025-stablecoin-legislation-adopted-in-the-us]
[4] Stablecoins and the Future of Payments [https://research.grayscale.com/reports/stablecoins-and-the-future-of-payments]
[5] Stablecoin Infrastructure as the New Backbone of Global Finance [https://www.ainvest.com/news/stablecoin-infrastructure-backbone-global-finance-2508/]
[6] Stablecoin Q1 2025: Insights on Trends & Regulation [https://blog.amberdata.io/stablecoin-q1-2025-insights-on-trends-regulation]