Stablecoins Gain Traction Among Retailers But Analysts Question Consumer Adoption

Stablecoins have gained significant traction in the payments world, with major retailers like Amazon and Walmart reportedly exploring their own tokens, and Shopify rolling out USDC/USD payments in over 30 countries. This has led some to speculate that stablecoins could pose an existential threat to traditional payment giants like Visa and Mastercard. However, analysts from a prominent financial firm are not convinced, arguing that the hype surrounding stablecoins is outpacing the reality of their use cases.

The latest developments in the stablecoin space include Shopify enabling merchants to accept USDC, and reports that Amazon and Walmart are considering issuing their own stablecoins or forming a consortium to launch a shared token. The goal of these initiatives is to reduce card network fees and gain more control over payments. In theory, stablecoins could lower costs, speed up settlement, and even fund rewards for shoppers if backed by interest-bearing reserves. However, the analysts believe that the real challenge lies in driving consumer adoption.

The analysts point out that while the value proposition for merchants is clear—lower acceptance costs by avoiding interchange fees—the incentives for consumers to adopt stablecoins are less apparent. They argue that consumer behavior in payments is often underestimated and that even with discounts or cashback, the incentives may not be sufficient to shift behavior at scale. If Amazon and Walmart do launch their own coins, the analysts expect the model to resemble a closed-loop wallet, with stablecoins used within each retailer’s ecosystem.

The analysts remain skeptical that U.S. consumers will adopt merchant-issued stablecoins at scale, noting that for stablecoins to displace cards, they would need to offer much deeper discounts or radically better utility. While stablecoins have been hailed as a solution for cross-border payments, the analysts suggest that in major currency corridors, stablecoins do not offer a speed or cost advantage over existing FX rails. Fiat conversion is still required at both ends of the transaction, limiting the benefits of stablecoins in these scenarios.

In harder-to-reach markets, stablecoins could improve margins by replacing SWIFT, but the impact is likely to be limited. The analysts conclude that while stablecoins are the latest buzzword in payments, they see little risk to Visa and Mastercard’s dominance until someone cracks the code on consumer adoption. For now, the existential threat posed by stablecoins looks more like a headline than a reality, with the established payment processors maintaining their stronghold in the market.