Key takeaways
Stablecoins accelerate settlement times, reduce cross-border fees, and facilitate programmable rewards, surpassing traditional credit card systems.
US merchants incur over $100 billion annually in card fees; in contrast, stablecoins provide significantly cheaper and faster payment options.
Examples like Ripple’s RLUSD, Gemini’s XRP Card, and Moca’s Air Shop illustrate the integration of stablecoins into mainstream commerce.
With major players pursuing adoption, stablecoins are poised to play a crucial role in US payment systems.
Since their inception in 2014, stablecoins have transformed traditional banking by offering price stability in the volatile cryptocurrency market. They have distinctively separated the functions of storing and transferring funds, allowing fintech companies to develop programmable services within a global digital currency framework.
Historically, businesses relied on card payments, while banks managed holding deposits and additional services.
Stablecoins largely replace this model with an ecosystem where most are centrally issued yet operate on decentralized networks, enhancing cross-border transfer speeds, reducing costs, stabilizing fund values, and implementing versatile reward systems that exceed credit card offerings.
When a credit card is used in the US, banks and payment networks typically take a cut of 1.5%-3.5% per transaction, diminishing merchants’ profits and leading to higher prices for consumers. However, the rise of stablecoins is beginning to alter this landscape.
This article delves into the costs tied to credit cards, compares stablecoins to credit cards, examines stablecoin use cases in the industry, and discusses how stablecoins are positively disrupting the credit card sector.
The cost you pay for credit cards
Credit cards are prevalent globally, not just in the US. However, this ease of use carries a substantial cost. Each transaction comes with hidden fees, including interchange fees for merchants, network fees from Visa and Mastercard, and other processing charges. Generally, these fees range from 1.5% to 3.5%, significantly impacting merchants’ profits.
Businesses, from airlines to small shops, often increase prices to accommodate these fees, which ultimately burdens consumers. The payment system is skewed in favor of card networks, leaving merchants with limited control and consumers indirectly funding network profits.
Stablecoins, pegged to fiat currencies like the US dollar, provide a solution with quicker, more affordable, and transparent transactions. By cutting out card networks and lowering fees, stablecoins can help businesses save costs and offer better prices to consumers.
Did you know? Stablecoins allow for programmable loyalty programs, unlike rigid cashback systems. Merchants can craft tailored rewards, permit trading or saving of points, and ensure that tokens retain value, redefining how loyalty is earned and spent.
What are stablecoins?
Stablecoins are cryptocurrencies designed to maintain a stable value by pegging to reliable assets, often the US dollar. Unlike volatile cryptocurrencies like Bitcoin (BTC) or Ether (ETH), stablecoins provide stability, making them ideal for daily transactions.
Their value is typically underpinned by cash reserves, short-term US Treasury securities, or similar assets, engineered to keep one token worth approximately one dollar. They merge the speed and efficiency of blockchain technology with the stability of conventional currency.
USDC (USDC), issued by Circle, is a stablecoin pegged to the dollar that operates under US money-services-business regulations and offers regular third-party attestations of its reserves. In December 2024, Ripple launched Ripple USD (RLUSD) and made it available on global exchanges after receiving the necessary regulatory approval from the New York Department of Financial Services. These US dollar-linked stablecoins are revolutionizing payment systems, offering businesses and consumers a cost-effective, fast, global alternative to traditional payment methods.
Stablecoins vs. credit cards: The case for a better payment system
Stablecoins serve as an alternative to credit cards by tackling two major issues in US payments: exorbitant fees and sluggish settlements.
While credit card payments seem instantaneous, merchants typically wait one to three business days to access their funds and simultaneously incur transaction fees of 1.5%-3.5%, eating into profit margins often passed to consumers. In contrast, stablecoins settle on blockchain networks within seconds to minutes at a fraction of the cost, providing merchants and customers with a swifter, cheaper option.
This capacity is drawing the interest of merchants, airlines, and large retailers eager to lessen their reliance on Visa and Mastercard’s established networks. By embracing stablecoins, they can recover lost revenue, maintain healthy profit margins, and sustain rich loyalty programs.
Initiatives are now underway using blockchain-powered platforms to facilitate stablecoin-based rewards points, preserving real-world value and ensuring loyalty programs remain appealing to customers while granting businesses tangible financial advantages.
Customers are empowered to truly own their rewards points, enabling them to save or transfer points for spending outside the original platforms.
Here’s a table illustrating the comparison between stablecoins and credit cards:
Use cases of stablecoins in the credit card industry
The rivalry between stablecoins and credit cards encompasses not only reduced costs and expedited transactions but also highlights the evolution of payment systems for consumers and businesses alike.
From cryptocurrency-backed credit cards to stablecoin-driven loyalty programs, the industry is innovating exciting hybrid solutions that blend traditional and contemporary payment methods.
Consider these two case studies for 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 collaboration with Ripple. The card offers up to 4% cashback in XRP (XRP) for gas, electric vehicle charging, and rideshare expenses (with a monthly cap); 3% for dining; 2% for groceries; and 1% on all other purchases. Rewards are instantly credited in cryptocurrency, and the card features no annual or foreign transaction fees.
Additionally, Gemini adopted Ripple USD (RLUSD) as the primary currency for all US spot trading pairs, simplifying currency conversions. In a bid to further bolster RLUSD, Ripple acquired Rail, a payments 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 was 21.16%. For accounts that carried a balance, the rate was even higher, averaging 22.25%.
Retail and e-commerce innovations
Air Shop, set to launch in September 2025, aims to transform loyalty programs through stablecoin-integrated commerce. The platform uses Air Kit for secure identity and tiered membership verification, offering personalized rewards. Its core comprises Stable-Points (AIR SP), USD-backed tokens linked to stablecoins that preserve their value unlike traditional loyalty points. These Stable-Points can be utilized at over 2 million merchants via BookIt.com, encompassing travel, retail, dining, and luxury experiences.
In contrast to conventional loyalty programs with limitations on usage or declining value, Air Shop guarantees flexibility and interoperability, allowing users to transfer rewards across brands. Merchants benefit from a transparent, cost-effective method to engage with customers, while consumers experience trust, flexibility, and genuine economic value.
The $100-billion potential: How stablecoins could disrupt the credit card industry
In 2024, credit cards topped the list of payment methods among US consumers, accounting for 35% of all transactions, with a total purchase volume of $5.51 trillion across 56.2 billion transactions using Visa and Mastercard products.
Stablecoins take aim at this costly system by offering nearly fee-free transactions, immediate settlements, and adaptable rewards via blockchain technology. If stablecoins do capture even 10%-15% of the transaction market, they could redirect billions in savings to both merchants and consumers.
Widespread adoption of stablecoin-based payments and loyalty programs by retailers, airlines, and e-commerce entities could intensify pressure on traditional credit card networks. Such a transformation would not only alter payment economics but also encourage broader integration of blockchain technology, potentially positioning stablecoins as a fundamental element of US financial infrastructure.
Did you know? Gemini’s XRP Credit Card, launched in 2025, represents a hybrid model that combines the convenience of credit cards with crypto rewards, demonstrating how fintech companies are merging established and innovative systems, easing consumers into blockchain-based payments without requiring them to entirely move away from traditional cards.
Stablecoins are becoming a core component of the financial system
The clash between stablecoins and credit cards extends beyond payment mechanisms, influencing who governs the flow of funds in this digital era. With growing regulatory clarity, institutional backing, and consumer trust, stablecoins present faster, more affordable, and programmable transactions that resonate powerfully.
Initiatives like Ripple’s RLUSD and Gemini’s offerings illustrate how cryptocurrency firms are integrating into mainstream finance. Concurrently, major retailers such as Amazon and Walmart are contemplating proprietary stablecoins to minimize fees and reconstruct loyalty schemes. Should these initiatives succeed, they could drastically reshape payment economics, redistributing billions in costs and benefits throughout the ecosystem.
While credit cards maintain a strong foothold, blockchain-enabled stablecoins are on the path to becoming essential to US commerce, reshaping incentives, reducing costs, and redefining customer engagement in a $100 billion payment 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.
