Essential Insights
Stablecoins expedite settlement times, lower cross-border fees, and facilitate programmable rewards, surpassing traditional credit card systems.
US merchants incur over $100 billion in card fees annually, whereas stablecoins offer significantly less expensive and faster payment options.
Examples like Ripple’s RLUSD, Gemini’s XRP Card, and Moca’s Air Shop illustrate stablecoins integrating into mainstream commerce.
As major players consider adoption, stablecoins are poised to become pivotal in US payment systems.
Since their inception in 2014 to stabilize the volatile cryptocurrency market, stablecoins have transformed conventional banking. They have disentangled the core functions of money storage and transfer, enabling fintechs to create programmable services on a global digital currency infrastructure.
Historically, businesses processed card payments, while banks retained control over deposits and additional service offerings.
Stablecoins largely replace this model with an ecosystem where many are centrally issued yet operate on decentralized networks. This change minimizes cross-border transfer times, cuts costs, stabilizes fund values, and introduces flexible rewards systems that outperform credit cards.
With each credit card transaction in the US, banks and payment networks take a cut, typically between 1.5% and 3.5%. This diminishes merchants’ profits and results in higher prices for consumers. However, stablecoins are beginning to alter this landscape.
This article explores the costs associated with credit cards, the advantages of stablecoins versus credit cards, their industry applications, and how they are positively disrupting the credit card sector.
The Price of Credit Cards
Credit cards are commonly used for transactions globally, but this convenience carries a hefty price tag. Each transaction incurs hidden costs, including interchange fees paid by merchants to banks, network fees from Visa and Mastercard, and other processing charges. These fees, often between 1.5% and 3.5%, eat into merchants’ profits.
Businesses such as airlines, retailers, and small shops often raise prices to recover these costs, indirectly impacting consumers. The payment system tends to favor card networks, leaving merchants with minimal control. As a result, consumers ultimately bear the burden of the networks’ profits.
Stablecoins, which are pegged to fiat currencies like the US dollar, offer a solution with rapid, cost-effective, and transparent transactions. By bypassing card networks and reducing fees, stablecoins can help businesses save money while providing better value to consumers.
Interesting Fact: Instead of rigid cashback or points systems, stablecoins allow for programmable loyalty programs. Merchants can tailor rewards across different brands, enabling customers to trade or save their tokens while ensuring their value is preserved, thus transforming loyalty accumulation and redemption.
Understanding Stablecoins
Stablecoins are a type of cryptocurrency designed to maintain a stable value by linking to stable assets, typically the US dollar. In contrast to volatile cryptocurrencies like Bitcoin (BTC) or Ether (ETH), stablecoins provide stability, making them ideal for everyday transactions.
Their value is generally underpinned by reserves of cash, short-term US Treasury securities, or similar assets, aiming to keep one token approximately equal to one dollar. They meld the speed and efficiency of blockchain technology with the dependability of traditional currency.
USDC (USDC), issued by Circle, is a dollar-pegged stablecoin operating under US money-services-business regulation, providing regular, third-party confirmations of its reserves. In December 2024, Ripple launched Ripple USD (RLUSD), making the coin available on worldwide exchanges following regulatory approval from the New York Department of Financial Services. These US dollar-linked stablecoins are revolutionizing the payment landscape, delivering a cost-effective, rapid, global alternative to traditional payment methods.
Stablecoins Versus Credit Cards: Advocating for Improved Payment Systems
Stablecoins offer a viable alternative to credit cards by tackling two significant issues in US payments: excessive fees and slow settlements.
While credit card payments seem instantaneous, merchants typically wait one to three business days to access funds. During this wait, they incur fees of 1.5%-3.5% per transaction, impacting margins that often get transferred to consumers. Stablecoins can settle on blockchain networks in seconds to minutes, at a much lower cost, providing a quicker and cheaper option for both merchants and customers.
It’s no surprise that stablecoins have attracted the attention of merchants, airlines, and large retailers eager to lessen their reliance on the entrenched networks of Visa and Mastercard. By adopting stablecoins, they can recapture lost revenue, protect slim margins, and still maintain effective loyalty programs.
Various projects are leveraging blockchain-powered platforms to offer stablecoin-based rewards points. This initiative preserves real-world value, keeping loyalty schemes appealing to customers while offering tangible financial benefits for businesses.
Customers can genuinely own their rewards points, allowing for saving or transferring them to use outside the platform where they were issued.
Here’s a table showing the comparison between stablecoins and credit cards:
Stablecoin Use Cases in the Credit Card Industry
The rivalry between stablecoins and credit cards is not just about lower expenses and quicker transactions. It also reflects how major companies are innovating payment systems for end users and businesses alike.
From cryptocurrency-backed credit cards to stablecoin-driven loyalty programs, the industry is crafting inventive hybrid solutions that merge traditional and contemporary payment methods.
Here are two case studies providing insights into how businesses are enhancing their payment systems:
Gemini and Ripple’s Strategic Initiatives
On Aug. 25, 2025, Gemini launched the XRP Credit Card in collaboration with Ripple. This card offers up to 4% cashback in XRP (XRP) for gas, electric vehicle charging, and rideshare purchases (with a monthly limit); 3% for dining; 2% for groceries; and 1% for all other expenses. Rewards are instantly credited in cryptocurrency, and there are no annual or foreign transaction fees.
Gemini also integrated Ripple USD (RLUSD) as the primary currency for all US spot trading pairs, simplifying currency conversion processes. To further bolster RLUSD, Ripple acquired Rail, a payment platform, for $200 million, enhancing capabilities for cross-border transactions, virtual accounts, and automation in its ecosystem.
Interesting Fact: In Q2 2025, the average interest rate on US credit cards hit 21.16%. Accounts carrying a balance saw even higher rates, averaging 22.25%.
Innovations in Retail and E-commerce
Air Shop, set to launch in September 2025, aims to revolutionize loyalty programs through stablecoin-driven commerce. The platform utilizes Air Kit for secure identity verification and membership tiers, offering customized rewards. Central to its system are Stable-Points (AIR SP), USD-backed tokens associated with stablecoins, retaining their value compared to traditional loyalty points. These Stable-Points can be used at over 2 million merchants via BookIt.com, covering travel, retail, dining, and luxury experiences.
In contrast to traditional loyalty programs that impose restrictions or devalue points, Air Shop guarantees flexibility and interoperability, allowing users to transfer rewards across brands. Merchants benefit from a clear, economical means of connecting with customers, while consumers gain trust, versatility, and real economic value.
The $100-billion Opportunity: How Stablecoins Could Transform the Credit Card Sector
In 2024, credit cards emerged as the preferred payment method for US consumers, representing 35% of all transactions. The total purchase volume reached $5.51 trillion across 56.2 billion transactions involving Visa and Mastercard products.
Stablecoins threaten this costly system by enabling nearly fee-free transactions, immediate settlements, and flexible rewards through blockchain technology. If stablecoins capture even 10%-15% of the transaction market, they could redirect billions in savings to both merchants and consumers.
Ongoing adoption of stablecoin-based payments and loyalty programs by retailers, airlines, and e-commerce entities could intensify pressure on traditional credit card networks. This shift would not only transform payment economics but also encourage wider acceptance of blockchain technology, establishing stablecoins as a fundamental element of US financial infrastructure.
Interesting Fact: Gemini’s XRP Credit Card, launched in 2025, features a hybrid model providing credit card convenience alongside crypto rewards. It illustrates how fintechs are merging traditional and modern systems, gradually introducing consumers to blockchain payments without requiring them to abandon conventional cards.
Stablecoins Are Becoming Integral to the Financial System
The rivalry between stablecoins and credit cards transcends payment methods. It influences who controls the monetary flow in our digital age. With growing regulatory clarity, institutional backing, and consumer trust, stablecoins provide faster, cheaper, and programmable transactions that are increasingly appealing.
Initiatives like Ripple’s RLUSD and offerings from Gemini highlight how cryptocurrency firms are positioning themselves within mainstream finance. Concurrently, major retailers such as Amazon and Walmart are investigating proprietary stablecoins to minimize fees and overhaul loyalty programs. If these efforts succeed, they could revolutionize payment economics, redistributing billions in costs and benefits across the ecosystem.
While credit cards remain entrenched, blockchain-centric stablecoins are poised to become a foundational component of US commerce, redefining incentives, lowering costs, and transforming customer engagement within a $100-billion payment landscape.
This article does not provide investment advice or recommendations. All investments and trading moves carry risk, and readers should perform their own due diligence before making decisions.
