US lawmakers are approaching the establishment of regulatory guidelines for stablecoins, which are cryptocurrencies designed to maintain a stable value by mirroring the US dollar.

Retailers, including Walmart and Amazon, are exploring stablecoins to address inefficiencies in current payment systems.

Merchants are drawn to stablecoins to reduce credit and debit card fees and accelerate transaction settlements.

Visa and Mastercard are adapting to this shift by offering stablecoin services and infrastructure through partnerships and new platforms.

While platforms like Shopify have enabled stablecoin payments, adoption faces hurdles such as wallet setup and lack of consumer incentives.

PayPal is addressing one challenge by building a platform for merchants to use stablecoins for international vendor payments.

Retailers welcome legislative clarity but acknowledge that stablecoin adoption will face technical, regulatory, and consumer behavior challenges.

🔗 Source: Bloomberg

🧠 Food for thought

1️⃣ The merchant-card network battle has persisted for decades before stablecoins

The current interest in stablecoins represents the latest chapter in a long-running conflict between merchants and payment networks over transaction fees.

This dispute has led to multiple previous attempts to create alternatives to credit card networks, including the Merchant Customer Exchange (MCX), a consortium formed by major retailers like Walmart and Target that was ultimately acquired by JPMorgan Chase nearly a decade ago 1.

Despite years of effort to promote “pay-by-bank” solutions that allow consumers to pay directly from bank accounts, these alternatives have gained limited traction in the U.S. market, leaving most transactions flowing through the established card networks.

The persistence of this battle explains why retailers are enthusiastic about stablecoin legislation. They see it as potential leverage in negotiations with Visa and Mastercard, whose interchange fees can significantly impact merchant profit margins.

This dynamic is particularly important for high-volume, low-margin businesses like convenience stores, whose industry association explicitly describes the current system as “the dictionary definition of a pricing cartel.”

2️⃣ Stablecoins have already achieved significant transaction volumes despite limited consumer adoption