Key takeaways
Stablecoins expedite settlement times, reduce cross-border costs, 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 quicker payment solutions.
Ripple’s RLUSD, Gemini’s XRP Card, and Moca’s Air Shop exemplify the integration of stablecoins into mainstream commerce.
As major players consider adoption, stablecoins are positioned to play a pivotal role in US payment systems.
Since their inception in 2014, stablecoins have transformed traditional banking by providing price stability in a volatile cryptocurrency market. They have dissociated the functions of storing and transferring funds, leading fintechs to develop programmable services on a global digital currency framework.
Historically, businesses have relied on card payments while banks managed the remaining functions, such as holding deposits and offering services. Stablecoins have largely disrupted this model, creating an ecosystem dominated by central issuance but operating on decentralized networks. They significantly reduce cross-border transfer times, lower costs, stabilize fund values, and introduce flexible reward systems that outperform credit cards.
Each time a credit card is utilized in the US, banks and payment networks take a small percentage of the transaction, generally between 1.5% and 3.5%. This erosion of merchants’ profits leads to increased prices for consumers. However, stablecoins are starting to change this dynamic.
This article explores the costs linked to credit cards, the comparison between stablecoins and credit cards, real-world applications of stablecoins, and their positive disruption of the credit card industry.
The cost you pay for credit cards
Credit cards are prevalent for transactions, not only in the US but globally. Nonetheless, this convenience comes with substantial costs. Each transaction incurs hidden fees, including interchange fees paid by merchants to banks, network fees by Visa and Mastercard, and additional processing charges. These fees, generally between 1.5% and 3.5%, directly cut into merchant profits.
Businesses such as airlines, retailers, and small shops frequently increase prices to account for these expenses, impacting consumers ultimately. The payment system predominantly favors card networks, leaving merchants with limited control while consumers bear the indirect costs of these networks’ profits.
Stablecoins, pegged to fiat currencies like the US dollar, present a solution through cheaper, faster, and clearer transactions. By bypassing card networks and reducing fees, stablecoins can help businesses reduce overheads and deliver greater value to consumers.
Did you know? Unlike traditional cashback or points programs, stablecoins allow for programmable loyalty initiatives. Merchants can tailor rewards across different brands, give customers options to trade or save them, and ensure consistent token value, revolutionizing loyalty earning and spending.
What are stablecoins?
Stablecoins are a form of cryptocurrency designed to maintain a consistent value by pegging to stable assets, typically the US dollar. In contrast to volatile cryptocurrencies like Bitcoin (BTC) or Ether (ETH), stablecoins provide stability, making them well-suited for everyday transactions.
These coins generally derive their value from reserves of cash, short-term US Treasury securities, or comparable assets, aiming to keep one token at approximately one dollar. They merge the speed and efficiency of blockchain technology with the dependability of traditional currency.
USDC (USDC), issued by Circle, is a stablecoin pegged to the dollar that functions under US money-services-business registration and routinely publishes independent attestations of its reserves. In December 2024, Ripple introduced Ripple USD (RLUSD), making it available on global exchanges after regulatory approval from the New York Department of Financial Services. These US dollar-linked stablecoins are revolutionizing payment systems, offering a swift, cost-effective 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 tackling two significant issues in US payments: high fees and slow settlements.
Although credit card payments may seem instantaneous, merchants typically wait one to three business days to access funds. During this wait, they also incur fees of 1.5%-3.5% per transaction, which diminish profit margins and are often passed on to consumers. Stablecoins settle on blockchain networks in mere seconds to minutes, at a considerably lower cost, presenting both merchants and customers with a faster, more economical option.
It’s no surprise that stablecoins have attracted attention from merchants, airlines, and large retailers keen to reduce reliance on the entrenched networks of Visa and Mastercard. By adopting stablecoins, they can recover lost revenue, safeguard margins, and continue robust loyalty programs.
Innovative projects are now utilizing blockchain-enabled platforms for stablecoin-based reward points, retaining real-world value and ensuring loyalty schemes appeal to customers while providing measurable financial benefits to businesses.
Customers gain true ownership of their reward points, allowing them to save or transfer points for spending outside the platform they were earned on.
Here is a table illustrating how stablecoins compare with credit cards:
Use cases of stablecoins in the credit card industry
The rivalry between stablecoins and credit cards extends beyond just lower costs and faster transactions. It highlights how major businesses are transforming payment frameworks for customers and companies alike.
From cryptocurrency-backed credit cards to stablecoin-powered loyalty programs, the industry is innovating hybrid solutions merging traditional and modern payment methods.
Here are two case studies to illustrate how businesses are refining their payment systems:
Gemini and Ripple’s strategic moves
On Aug. 25, 2025, Gemini launched the XRP Credit Card in partnership 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 grocery purchases; and 1% for all other transactions. Rewards are instantly credited in cryptocurrency, and the card has no annual or foreign transaction fees.
Gemini has also adopted Ripple USD (RLUSD) as the base currency for all US spot trading pairs, simplifying currency conversions. To bolster RLUSD, Ripple acquired Rail, a payment platform, for $200 million, incorporating tools for cross-border payments, virtual accounts, and automation into its ecosystem.
Did you know? In Q2 2025, the average interest rate on US credit cards hit 21.16%. For accounts carrying a balance, the rate averaged 22.25%.
Retail and e-commerce innovations
Air Shop, set to launch in September 2025, aims to revolutionize loyalty programs via stablecoin-based commerce. The platform employs Air Kit for secure identity and tiered membership verification, offering customized rewards. At its core are Stable-Points (AIR SP), USD-backed tokens linked to stablecoins, maintaining their value unlike traditional loyalty points. These Stable-Points can be utilized at over 2 million merchants via BookIt.com, covering travel, retail, dining, and luxury experiences.
In contrast to conventional loyalty programs with limitations or declining value, Air Shop ensures flexibility and interoperability, enabling users to carry rewards across brands. Merchants gain a transparent, cost-efficient avenue to engage customers, while consumers benefit from trust, flexibility, and real economic value.
The $100-billion potential: How stablecoins could disrupt the credit card industry
In 2024, credit cards remained the preferred payment method among US consumers, representing 35% of all transactions. The total purchase volume reached $5.51 trillion over 56.2 billion transactions made with Visa and Mastercard.
Stablecoins challenge this costly framework by enabling nearly fee-free transactions, instantaneous settlements, and flexible rewards powered by blockchain technology. If stablecoins capture even 10%-15% of the transaction market, they could redirect billions in savings to merchants and consumers.
The ongoing adoption of stablecoin-based payments and loyalty programs by retailers, airlines, and e-commerce entities could escalate pressure on traditional credit card networks. Such a transition would not only alter payment economics but also encourage broader blockchain technology use, linking stablecoins from a niche solution to a fundamental element of US financial infrastructure.
Did you know? Gemini’s XRP Credit Card launched in 2025 showcases a hybrid model providing credit card convenience alongside crypto rewards, illustrating how fintechs blend traditional and modern systems, easing consumers into blockchain-based payments without completely abandoning plastic.
Stablecoins are becoming a core component of the financial system
The competition between stablecoins and credit cards goes beyond mere payment methods. It will influence who controls money flow in the digital era. With growing regulatory clarity, institutional backing, and consumer trust, stablecoins promise faster, cheaper, and programmable transactions that are immensely attractive.
Efforts such as Ripple’s RLUSD and Gemini’s initiatives highlight how cryptocurrency companies are embedding within mainstream finance. In parallel, major retailers like Amazon and Walmart are investigating proprietary stablecoins to reduce fees and innovate loyalty programs. Should these ventures succeed, they could dramatically transform the economics of payments, redistributing billions in costs and benefits throughout the ecosystem.
While credit cards remain deeply ingrained, blockchain-enabled stablecoins are likely to become essential components of US commerce, reshaping incentives, lowering costs, and redefining customer engagement in a $100-billion payment landscape.
This article does not provide investment advice or recommendations. All investments and trading decisions carry risks, and readers should perform their own research before making any decisions.
