Key takeaways
Stablecoins streamline settlement times, cut cross-border costs, and enable customizable rewards, surpassing traditional credit card systems.
US merchants incur over $100 billion in annual card fees, while stablecoins provide a more economical and faster payment solution.
Ripple’s RLUSD, Gemini’s XRP Card, and Moca’s Air Shop demonstrate stablecoins entering mainstream commerce.
As major players consider adoption, stablecoins are set to play a pivotal role in US payment systems.
Since their inception in 2014, stablecoins have redefined traditional banking by offering price stability in the volatile cryptocurrency market. They have distinctively separated the functions of money storage and transfer, allowing fintech companies to build programmable services on a global digital currency system.
Historically, businesses relied on card payments while banks managed tasks like holding deposits and providing additional services.
Stablecoins disrupt this model by creating an ecosystem where most are centrally issued yet operate on decentralized networks. They enhance cross-border transfer speed, reduce costs, stabilize fund values, and introduce flexible loyalty programs, outpacing traditional credit cards.
Every time a credit card is utilized in the US, banks and payment networks take a small cut of the transaction, typically ranging from 1.5% to 3.5%. This significantly erodes merchants’ profits and ultimately leads to inflated consumer prices. This dynamic is beginning to shift due to the rise of stablecoins.
This article delves into the fees associated with credit cards, compares stablecoins to credit cards, explores stablecoin use cases in various industries, and discusses how stablecoins are innovating the credit card sector for the better.
The cost you pay for credit cards
Credit cards are a popular payment method worldwide, but this convenience comes at a steep cost. Each transaction incurs hidden fees, including interchange fees that merchants pay banks and network fees collected by Visa and Mastercard, alongside other processing expenses. These fees generally range between 1.5% and 3.5%, adversely affecting merchants’ profits.
To cover these costs, businesses like airlines and retailers often inflate prices, impacting consumers. The existing payment system favors card networks, leaving merchants with minimal control, while consumers unknowingly fund these networks’ profits.
Stablecoins, which are pegged to fiat currencies like the US dollar, offer a faster, cheaper, and more transparent transaction solution. By circumventing card networks and minimizing fees, stablecoins enable businesses to save and provide better value to consumers.
Did you know?Unlike traditional cashback or points systems, stablecoins facilitate programmable loyalty programs. Merchants can design custom rewards across various brands, allowing customers to trade or save points while ensuring tokens retain their value, transforming loyalty earning and spending.
What are stablecoins?
Stablecoins are a cryptocurrency designed to maintain a stable value by pegging to stable assets, primarily the US dollar. This stability makes them suitable for everyday transactions, in contrast to more volatile cryptocurrencies like Bitcoin (BTC) or Ether (ETH).
Typically supported by reserves of cash, short-term US Treasury securities, or similar assets, stablecoins aim to keep their value around one dollar. They blend the speed and efficiency of blockchain technology with the reliability of traditional currency.
USDC (USDC), issued by Circle, is a dollar-pegged stablecoin operating under US money-services regulations and providing regular, third-party confirmations of its reserves. Ripple introduced Ripple USD (RLUSD) in December 2024, making it available on global exchanges after receiving regulatory clearance from New York’s Department of Financial Services. These dollar-linked stablecoins are revolutionizing payment systems, offering businesses and consumers a rapid, cost-effective, and global alternative to conventional payment methods.
Stablecoins vs. credit cards: The case for a better payment system
Stablecoins provide an alternative to credit cards by targeting two of the greatest challenges in US payments: excessive fees and slow processing times.
While credit card payments seem instantaneous, merchants often wait one to three business days to receive funds. During this wait, they incur 1.5% to 3.5% fees per transaction, impacting profit margins often passed on to consumers. In contrast, stablecoins facilitate settlements on blockchain networks in seconds to minutes and at a significantly lower cost, providing a faster and more economical option for both merchants and customers.
No wonder stablecoins have piqued the interest of merchants, airlines, and large retailers eager to lessen their reliance on established networks like Visa and Mastercard. By adopting stablecoins, they can reclaim lost revenue, safeguard tight margins, and sustain robust loyalty programs.
Some initiatives are using blockchain-based platforms to enable stablecoin-led rewards points, retaining genuine value while ensuring that loyalty programs are enticing for customers and delivering real financial rewards for businesses.
Customers can genuinely own their reward points, with the ability to save or transfer them for spending outside the platform where they were earned.
Here’s a table comparing stablecoins to credit cards:
Use cases of stablecoins in the credit card industry
The rivalry between stablecoins and credit cards transcends mere cost and speed; it reflects how significant companies are redefining payment systems for consumers and businesses alike.
From cryptocurrency-based credit cards to loyalty programs utilizing stablecoins, the industry is innovating hybrid solutions that blend traditional and contemporary payment systems.
Here are two case studies offering insights into how businesses are enhancing their payment systems:
Gemini and Ripple’s strategic moves
On Aug. 25, 2025, Gemini launched the XRP Credit Card in partnership with Ripple, providing up to 4% cashback in XRP (XRP) for gas, electric vehicle charging, and rideshare expenses (with a monthly limit); 3% for dining; 2% for groceries; and 1% for all other transactions. Rewards are instantly credited in cryptocurrency, and there are no annual or international transaction fees.
Gemini also adopted Ripple USD (RLUSD) as the primary currency for all US spot trading pairs, streamlining currency conversions. Furthermore, Ripple acquired Rail, a payment platform, for $200 million, enhancing its ecosystem with tools for cross-border payments, virtual accounts, and automation.
Did you know? In Q2 2025, the average interest rate on US credit cards hit 21.16%. Those carrying balances face an even higher average rate of 22.25%.
Retail and e-commerce innovations
Air Shop, set to launch in September 2025, aims to transform loyalty programs through stablecoin-powered commerce. Utilizing Air Kit for secure identity and tiered membership validation, it offers personalized rewards. Central to this platform are Stable-Points (AIR SP), USD-backed tokens connected to stablecoins that ensure value stability, unlike conventional loyalty points. These Stable-Points can be redeemed at over 2 million merchants via BookIt.com, covering travel, retail, dining, and luxury experiences.
In contrast to traditional loyalty schemes with restrictive usage or decreasing value, Air Shop provides flexibility and interoperability, allowing users to carry rewards between brands. Merchants obtain a clear, cost-efficient method to engage with customers, while consumers benefit from trust, flexibility, and substantial economic value.
The $100-billion potential: How stablecoins could disrupt the credit card industry
In 2024, credit cards remained the top payment method among US consumers, constituting 35% of all transactions. The total purchase volume reached $5.51 trillion across 56.2 billion transactions facilitated by Visa and Mastercard.
Stablecoins present an alternative to this costly system, offering nearly fee-less transactions, immediate settlements, and adaptable rewards using blockchain technology. Should stablecoins capture even 10%-15% of the transaction market, they could shift billions in savings to merchants and consumers alike.
The further adoption of stablecoin-based payments and loyalty initiatives by retailers, airlines, and e-commerce businesses could pressurize traditional credit card networks. Such a shift would not only alter payment economics but also encourage the broader application of blockchain technology, elevating stablecoins from niche solutions to crucial components of US financial infrastructure.
Did you know? Gemini’s XRP Credit Card, released in 2025, exemplifies a hybrid model that merges credit card convenience with cryptocurrency rewards, illustrating how fintechs are integrating old and new systems to facilitate consumers’ transition to blockchain payments without completely abandoning plastic cards.
Stablecoins are becoming a core component of the financial system
The competition between stablecoins and credit cards extends beyond mere payment methods. It will define who governs the flow of money in the digital era. With increased regulatory transparency, institutional backing, and consumer trust, stablecoins promise faster, cheaper, and programmable transactions that hold significant appeal.
Efforts such as Ripple’s RLUSD and Gemini’s initiatives highlight how cryptocurrency firms are embedding themselves in mainstream finance. Concurrently, major retailers like Amazon and Walmart are investigating proprietary stablecoins to cut expenses and reinvent loyalty programs. Should these efforts succeed, they could revolutionize the economics of payments, redistributing billions in costs and benefits throughout the ecosystem.
Although credit cards remain entrenched, blockchain-driven stablecoins are expected to become central to US commerce, altering incentives, lowering costs, and redefining customer engagement in a $100-billion payments landscape.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
