Key takeaways
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Stablecoins reduce settlement time, cross-border costs and enable programmable rewards. They outpace traditional credit card systems.
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US merchants pay over $100 billion in card fees yearly. In comparison, stablecoins offer much cheaper, faster payments.
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Ripple’s RLUSD, Gemini’s XRP Card and Moca’s Air Shop show stablecoins moving into mainstream commerce.
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With big players exploring adoption, stablecoins are positioned to become central to US payment systems.
Since stablecoins first emerged in 2014 to provide price stability in the volatile cryptocurrency market, they have redefined traditional banking. They have separated the core functions of storing and transferring money, which allows fintechs to build programmable services on a global digital currency system.
Traditionally, businesses accepted card payments, while the remaining functions, including holding deposits and offering additional services and tools, were the banks’ domain.
Stablecoins have largely replaced this with an ecosystem where most are centrally issued but operate on decentralized networks rather than a centralized entity. Moreover, it reduces cross-border transfer times, lowers costs, stabilizes fund values and introduces flexible reward systems that outpace credit cards.
Each time a credit card is used in the US, banks and payment networks take a small portion of the transaction, typically 1.5%-3.5%. This significantly reduces profits of merchants and contributes to higher prices for consumers. This is starting to change thanks to stablecoins.
This article discusses the costs associated with credit cards, how stablecoins compare with credit cards, stablecoin use cases in the industry and how stablecoins are disrupting the credit card industry for the better.
The cost you pay for credit cards
Credit cards are widely used for payments, not just in the US, but across the world. However, this convenience has a high cost. Each transaction involves hidden fees, such as interchange fees paid by merchants to banks, network fees collected by Visa and Mastercard and other processing costs. These fees, typically between 1.5% and 3.5%, cut directly into merchants’ profits.
Businesses like airlines, retailers and small shops often raise prices to cover these costs, which ultimately affects consumers. The payment system favors card networks, leaving merchants with little control. Meanwhile, consumers end up indirectly paying for the networks’ profits.
Stablecoins, pegged to a fiat currency like the US dollar, offer a solution with faster, cheaper and clearer transactions. By avoiding card networks and lowering fees, stablecoins could help businesses save money and provide better value to consumers.
Did you know? Unlike rigid cashback or points systems, stablecoins enable programmable loyalty programs. Merchants can customize rewards across brands, let customers trade or save them and ensure tokens maintain value, reshaping how loyalty is earned and spent.
What are stablecoins?
Stablecoins are a type of cryptocurrency created to hold a steady value by pegging to stable assets, usually the US dollar. Unlike unpredictable cryptocurrencies like Bitcoin (BTC) or Ether (ETH), stablecoins offer stability, making them suitable for daily transactions.
Their value is typically supported by reserves of cash, short-term US Treasury securities or similar assets, designed to maintain one token at roughly one dollar. They combine the speed and efficiency of blockchain technology with the reliability of traditional currency.
USDC (USDC), issued by Circle, is a dollar-pegged stablecoin that operates under US money-services-business registration and publishes regular, third-party attestations of its reserves. In December 2024, Ripple launched Ripple USD (RLUSD), making the coin available on global exchanges after receiving regulatory approval from the New York Department of Financial Services. These US dollar-linked stablecoins are transforming the payment system, providing businesses and consumers with a cost-effective, fast, global alternative to traditional payment methods.
Stablecoins vs. credit cards: The case for a better payment system
Stablecoins present an alternative to credit cards by addressing two of the biggest pain points in US payments: high fees and slow settlements.
Credit card payments may feel instant, but merchants usually wait one to three business days to receive funds. During that delay, they also pay fees of 1.5%-3.5% per transaction, which cut into margins and often get passed on to consumers. Stablecoins settle on blockchain networks, usually within seconds to minutes, at a fraction of the cost, giving both merchants and customers a faster and cheaper option.
No wonder stablecoins have caught the attention of merchants, airlines and large retailers that are eager to reduce their dependence on Visa and Mastercard’s entrenched networks. By adopting stablecoins, they can reclaim lost revenue, protect tight margins and still maintain robust loyalty programs.
Projects are now using blockchain-powered platforms to facilitate stablecoin-based rewards points. It helps retain real-world value, ensuring loyalty schemes remain attractive to customers while delivering tangible financial benefits to businesses.
Customers are able to truly own their reward points, which means they can save the points or move them elsewhere to spend outside of the platform where they were earned.
Here is a table illustrating how stablecoins compare with credit cards:
Use cases of stablecoins in the credit card industry
The competition between stablecoins and credit cards is not just about lower costs and quicker transactions. It also reflects how major companies are reshaping payment systems for end customers and businesses.
From cryptocurrency-backed credit cards to stablecoin-based loyalty programs, the industry is developing creative hybrid solutions that combine traditional and modern payment approaches.
Here are two case studies to help you get insights into how businesses are refining their payment systems:
Gemini and Ripple’s strategic moves
On Aug. 25, 2025, Gemini introduced the XRP Credit Card in collaboration with Ripple. The card provides up to 4% cashback in XRP (XRP) for gas, electric vehicle charging and rideshare purchases (with a monthly cap); 3% for dining; 2% for groceries; and 1% for all other purchases. Rewards are credited instantly in crypto, and the card has no annual or foreign transaction fees.
Gemini also adopted Ripple USD (RLUSD) as the base currency for all US spot trading pairs, simplifying currency conversions. To further support RLUSD, Ripple acquired Rail, a payments platform, for $200 million, adding tools for cross-border payments, virtual accounts and automation to its ecosystem.
Did you know? In Q2 2025, the average interest rate on US credit cards was 21.16%. For accounts carrying a balance, the rate was even higher, averaging 22.25%.
Retail and e-commerce innovations
Air Shop, scheduled for launch in September 2025, seeks to reshape loyalty programs through stablecoin-powered commerce. The platform employs Air Kit for secure identity and tiered membership verification, offering tailored rewards. At its core are Stable-Points (AIR SP), USD-backed tokens linked to stablecoins, which maintain their value unlike traditional loyalty points. These Stable-Points can be used at over 2 million merchants via BookIt.com, spanning travel, retail, dining and luxury experiences.
Unlike conventional loyalty programs with restrictive usage or diminishing value, Air Shop ensures flexibility and interoperability, letting users carry rewards across brands. Merchants gain a transparent, cost-effective way to connect with customers, while consumers enjoy trust, flexibility and genuine economic value.
The $100-billion potential: How stablecoins could disrupt the credit card industry
In 2024, credit cards were the most popular payment method among US consumers, accounting for 35% of all transactions. The total purchase volume reached $5.51 trillion across 56.2 billion transactions made with Visa and Mastercard products.
Stablecoins challenge this expensive system by providing nearly cost-free transactions, instant settlements and flexible rewards through blockchain technology. If stablecoins gain even 10%-15% of the transaction market, they could redirect billions in savings to merchants and consumers.
Continued adoption of stablecoin-based payments and loyalty programs by retailers, airlines and e-commerce companies could increase pressure on traditional credit card networks. Such a shift would not only reshape payment economics but also promote broader use of blockchain technology, transitioning stablecoins from a niche solution to a central component of US financial infrastructure.
Did you know? Gemini’s XRP Credit Card launched in 2025 and is a hybrid model offering credit card convenience with crypto rewards. It shows how fintechs are blending old and new systems, easing consumers into blockchain-based payments without forcing them to abandon plastic.
Stablecoins are becoming a core component of the financial system
The competition between stablecoins and credit cards extends beyond payment methods. It determines who will control the flow of money in the digital age. With increasing regulatory clarity, institutional support and consumer confidence, stablecoins offer faster, cheaper and programmable transactions that are highly appealing.
Initiatives like Ripple’s RLUSD and Gemini’s offerings demonstrate how cryptocurrency companies are embedding themselves in mainstream finance. At the same time, major retailers such as Amazon and Walmart are exploring proprietary stablecoins to cut fees and reinvent loyalty programs. If these initiatives succeed, they could transform the economics of payments, redistributing billions in costs and benefits across the ecosystem.
While credit cards remain deeply rooted, blockchain-powered stablecoins are likely to become a core component of US commerce, reshaping incentives, lowering 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.