PSPs Are Making Stablecoin Payments a Reality

It’s been easy to say that all the dire predictions about stablecoins taking over payments and pushing out national currencies were wildly overblown as their actual use outside of crypto exchanges has been minimal — to the point of being nearly non-existent. That could be about to change.

Or, at least, it can change now, and for a very simple reason: People can actually spend it.

Over the past six months, three major payments processors — Worldpay from FIS, and Stripe — have all added the capacity to settle transactions with Circle’s USD Coin (USDC) stablecoin — joining Visa, which established a pathway for digital currency settlement back in March 2020.

That isn’t to say that the number of stablecoin payments has risen dramatically — but the settlement capacity is there now, as is the interest among current crypto users, BitPay’s CEO Stephen Pair told PYMNTS, noting that the percentage of transactions using USDC and other stablecoins (such as Tether’s USDT) rather than traditional cryptocurrencies (like bitcoin) have nearly doubled since the beginning of the year to around 23%.

See more: BitPay CEO Says Stablecoin Payment Volumes Doubled in 2022

This trend is exactly what central bankers, regulators, elected officials and international financial organizations have feared since Facebook announced its ill-fated Libra stablecoin project back in the summer of 2019. The biggest bogeyman in that project, later renamed Diem, was the ability of 2.3 billion Facebook users to start using the stablecoins all at once, potentially overshadowing national fiat currencies.

It was enough to kick off the central bank digital currency (CBDC) race that now has about 100 countries considering, planning or building digital versions of their currency, along with nine that have already launched them and China on the edge of doing so. CBDCs have been pitched very clearly as an alternative to stablecoins, particularly in the EU as well as countries like India, which is determined to ban crypto payments of any kind.

Pulling Ahead in Payments

That’s not to say that USDC is the only crypto payments option. Strike rolled out bitcoin payments capacity back in April, teaming up with point-of-sale terminal maker NCR among others, and Block’s Cash App has been doing it for years. PayPal opened its 35 million-strong merchant network to bitcoin and three other cryptocurrencies, and both Visa and Mastercard offer crypto debit cards that support scores of currencies.

But with top payment service providers choosing its offering over Tether’s, Circle does seem to be pulling ahead in the real-world payments race at the moment, despite being No. 2 by market capitalization, at about $49 billion compared to USDT’s $68 billion. But USDT dominates in the primary use of stablecoins, acting as a lubricant for crypto traders, with daily volume that is 15x that of USDC.

USDC has the strongest reputation for keeping a well-audited and transparent reserve of dollars and U.S. Treasuries backing its stablecoins one-to-one, putting it ahead of Tether, which has dealt with longstanding questions in that regard, particularly after paying out a $41 million settlement with the Commodity Futures Trading Commission and another for $18.5 million with the New York Attorney General’s office for misleading customers about its reserves.

Also see: Tether Must Pay $41M After Misleading Customers About Stablecoin Backing

But stablecoin spending broadly has a couple of other things going for it, notably that the crypto spending push that began this year took place as the value of bitcoin and other cryptocurrencies has tumbled dramatically, pushing owners to hold onto them rather than spend at the bottom of the market.

They are also growing in international transactions, as the lack of price volatility is added to the desire for dollars in developing countries — and dollar-denominated stablecoins that are also cheap to send and arrive in near real-time are a good substitute.

Three Wins

In April, Nabil Manji, senior vice president and head of crypto and Web3 at Worldpay from FIS, said in a release that by allowing merchants to receive settlement directly in USDC, the company hoped that by “making it easier and more efficient… to receive and manage stablecoins, this will further drive corporate innovation in payments and benefit the consumer ecosystem.”

Also read: FIS, Circle Team Up to Offer USDC Acceptance

On June 7, unveiled a stablecoin settlement solution available 24/7 — which notably includes weekends, the firm said in a release.

More here: Teams With Fireblocks on Stablecoin Settlement Tool

Jess Houlgrave, head of cryptos at, said the company believed stablecoins will “play a fundamental role in improving the underlying payment landscape” and that the company was “investing heavily to ensure we can fulfill our mission to enable businesses and their communities to thrive in the digital economy — which we believe includes Web3,”  in a release.

Stripe, meanwhile, has concentrated on the freelancer and gig economy for its stablecoin payments, rolling out payments to 70 countries in April, and increasing that to 110 on Sept. 22. In that case, the company’s focus is an audience that heavily favors payments that are fast and in dollars — often highly preferrable in developing countries.

See this: Stablecoins Seeks to Break into Gig Economy


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