Essential Insights
Stablecoins streamline settlement times, lower cross-border expenses, and enable programmable incentives, surpassing traditional credit card frameworks.
US merchants incur over $100 billion in card fees annually, whereas stablecoins facilitate quicker, more cost-effective transactions.
Ripple’s RLUSD, Gemini’s XRP Card, and Moca’s Air Shop illustrate the integration of stablecoins into mainstream commerce.
As major players investigate incorporation, stablecoins are set to play a pivotal role in US payment systems.
Since their introduction in 2014 to provide stability in the volatile cryptocurrency arena, stablecoins have transformed conventional banking norms. They’ve effectively decoupled the essential functions of money storage and transfer, enabling fintechs to create programmable services on a universal digital currency platform.
Traditionally, businesses processed card payments while banks maintained control over deposits and additional services.
Stablecoins have largely shifted this paradigm, creating an ecosystem where most are centrally issued yet function on decentralized networks rather than under a single authority. Furthermore, they expedite cross-border transfers, reduce transaction costs, stabilize value, and incorporate adaptable rewards systems exceeding those offered by credit cards.
When a credit card is used in the US, banks and payment networks take a small cut of the transaction, typically ranging from 1.5% to 3.5%. This diminishes merchants’ profits and leads to higher prices for consumers, but stablecoins are changing the narrative.
This article examines the expenses linked to credit card usage, contrasts them with stablecoins, highlights industry use cases, and reveals how stablecoins are positively disrupting the credit card sector.
The Expenses Associated with Credit Cards
Credit cards are a popular payment method worldwide, not just in the US. However, this convenience comes at a significant cost. Each transaction incurs hidden fees, including interchange fees paid by merchants, network fees from Visa and Mastercard, and various processing expenses. These fees, typically between 1.5% and 3.5%, directly reduce profits for merchants.
Businesses, including airlines and retail entities, often elevate prices to accommodate these costs, impacting consumers in the process. The payment system tends to favor card networks, limiting merchants’ control. As a result, consumers indirectly bear the brunt of these network profits.
Stablecoins, linked to stable fiat currencies like the US dollar, provide a solution with faster, less expensive, and more transparent transactions. By circumventing card networks and minimizing fees, stablecoins can aid businesses in saving money while delivering enhanced value to consumers.
Did you know? Unlike rigid cashback or points systems, stablecoins facilitate programmable loyalty programs. Merchants can tailor rewards across different brands, allowing customers to trade or save them while ensuring tokens retain value, thus transforming loyalty earned and spent.
Understanding Stablecoins
Stablecoins are a category of cryptocurrency designed to maintain a consistent value by pegging to stable assets, most often the US dollar. Unlike volatile cryptocurrencies like Bitcoin (BTC) or Ether (ETH), stablecoins provide stability, making them suitable for everyday transactions.
Typically, their value is underpinned by reserves of cash, short-term US Treasury securities, or similar assets, aiming to keep one token valued at approximately one dollar. They merge the speed and efficiency of blockchain technology with the dependability of traditional currency.
USDC (USDC), issued by Circle, stands as a dollar-pegged stablecoin operating under US money-services-business registration and regularly publishes third-party attestations of its reserves. In December 2024, Ripple introduced Ripple USD (RLUSD), launching the coin on global exchanges following regulatory approval from the New York Department of Financial Services. These US dollar-linked stablecoins are revolutionizing the payment landscape, offering businesses and consumers a cost-effective, rapid, global substitute for traditional payment methods.
Stablecoins vs. Credit Cards: Advocating for Improved Payment Systems
Stablecoins provide an alternative to credit cards by tackling two major challenges in US payments: exorbitant fees and sluggish settlements.
Although credit card payments may seem instantaneous, merchants typically wait one to three business days to receive their funds. During this delay, they incur transaction fees of 1.5%-3.5%, which eat into their profit margins and are often passed on to customers. Stablecoins, facilitated by blockchain networks, settle transactions in mere seconds to minutes, at a fraction of the expense, offering a quicker and cheaper option for both merchants and customers.
It’s no surprise that stablecoins have garnered interest from merchants, airlines, and large retailers eager to diminish their reliance on established Visa and Mastercard networks. By embracing stablecoins, they can recover lost revenue, safeguard tight margins, and maintain effective loyalty programs.
Current innovations are utilizing blockchain-enabled platforms to create stablecoin-based rewards systems, retaining real-world value and ensuring loyalty schemes remain appealing to customers while delivering notable financial benefits to businesses.
Customers can genuinely own their reward points, enabling them to save or transfer the points for use outside the platform where they were earned.
Here’s a table illustrating the comparison between stablecoins and credit cards:
Stablecoin Use Cases in the Credit Card Sector
The competition between stablecoins and credit cards highlights not just lower costs and swifter transactions, but also how large corporations are reshaping payment systems for end users and businesses alike.
From cryptocurrency-backed credit cards to stablecoin-based loyalty initiatives, the industry is pioneering hybrid solutions that fuse traditional and contemporary payment methods.
Consider these two case studies shedding light on how some businesses are enhancing their payment frameworks:
Strategic Innovations by Gemini and Ripple
On Aug. 25, 2025, Gemini launched the XRP Credit Card in partnership with Ripple, offering up to 4% cashback in XRP (XRP) for fuel, electric vehicle charging, and rideshare expenses (with a monthly cap); 3% for dining; 2% for grocery purchases; and 1% for all other transactions. Rewards are instantly credited in crypto, and the card carries no annual or foreign transaction fees.
Additionally, Gemini adopted Ripple USD (RLUSD) as the base currency for all US spot trading pairs, simplifying currency exchanges. To further support RLUSD, Ripple acquired Rail, a payments platform, for $200 million, enhancing its ecosystem with tools for cross-border transactions, virtual accounts, and automation.
Did you know? In Q2 2025, the average interest rate on US credit cards stood at 21.16%. For accounts carrying a balance, the rate was even higher, averaging 22.25%.
Retail and E-commerce Innovations
Air Shop, launching in September 2025, aims to redefine loyalty programs through stablecoin-driven commerce. The platform utilizes Air Kit for secure identity verification and tiered membership, offering personalized rewards. At its core are Stable-Points (AIR SP), USD-backed tokens associated with stablecoins that preserve their value unlike conventional loyalty points. These Stable-Points can be redeemed across over 2 million merchants via BookIt.com, covering travel, retail, dining, and luxury services.
In contrast to traditional loyalty programs with restrictive usage or diminishing value, Air Shop promotes flexibility and interoperability, allowing users to carry rewards among different brands. Merchants benefit from a transparent, cost-effective method to engage customers, while consumers enjoy trust, adaptability, and authentic economic value.
The $100-Billion Opportunity: Stablecoins Disrupting the Credit Card Industry
Stablecoins pose a challenge to this costly system by offering almost fee-free transactions, immediate settlements, and adaptable rewards through blockchain technology. If stablecoins capture even 10%-15% of the transaction market, they could redirect billions in savings to merchants and consumers.
The continued acceptance of stablecoin-based payment and loyalty programs by retailers, airlines, and e-commerce firms may increase pressure on conventional credit card networks. Such a transition could not only alter payment economics but also encourage broader adoption of blockchain technology, moving stablecoins from a niche solution to an integral part of US financial infrastructure.
Did you know? Gemini’s XRP Credit Card, introduced in 2025, represents a hybrid model that combines credit card usability with crypto rewards, showcasing fintechs’ efforts to merge traditional and modern systems, easing consumers into blockchain payments without requiring them to give up plastic.
Stablecoins as a Core Element of the Financial Ecosystem
The rivalry between stablecoins and credit cards transcends payment methods, determining who will dominate the monetary flows in the digital era. With growing regulatory clarity, institutional backing, and consumer assurance, stablecoins deliver faster, more affordable, and programmable transactions, making them highly attractive.
Endeavors like Ripple’s RLUSD and Gemini’s initiatives illustrate the integration of cryptocurrency firms into mainstream finance. Concurrently, major retailers like Amazon and Walmart are investigating proprietary stablecoins to minimize fees and revamp loyalty programs. If successful, these efforts could revolutionize payment economics, redistributing billions in costs and benefits throughout the ecosystem.
While credit cards remain deeply embedded in the market, blockchain-based stablecoins are poised to emerge as a fundamental aspect of US commerce, redefining incentives, lowering costs, and transforming customer engagement in a $100-billion payment landscape.
This article does not contain investment advice or recommendations. Every investment and trading decision carries risks, and readers should conduct thorough research before making choices.
