Stablecoins and Credit Cards: The $100B Clash for the Future of US Payments

Key Takeaways

• Stablecoins accelerate settlements, cut cross-border expenses and introduce programmable rewards, outperforming conventional credit card networks.

• US merchants lose over $100 billion annually to card fees, while stablecoins provide a faster and far more cost-efficient alternative.

• Initiatives such as Ripple’s RLUSD, Gemini’s XRP Card and Moca’s Air Shop highlight how stablecoins are entering mainstream commerce.

• As major players move toward adoption, stablecoins are on track to become a cornerstone of the US payments ecosystem.

Introduction

When stablecoins first appeared in 2014, their purpose was to bring stability to the highly volatile cryptocurrency market. Over time, their role has expanded far beyond that. They have altered the architecture of financial services by separating the core functions of storing and transferring money, allowing fintech companies to build programmable services on top of a global, digital currency infrastructure.

Traditionally, businesses relied on banks and card networks for payments. Merchants would process transactions through credit cards, while banks managed deposits, offered services and handled settlement. Stablecoins have disrupted this arrangement. They are usually issued by centralized entities but operate across decentralized networks. This structure reduces cross-border transaction times, lowers fees, preserves value, and enables programmable rewards that outperform the current credit card system.

Every time a credit card is used in the United States, banks and payment networks collect between 1.5% and 3.5% of the transaction value. These charges eat into merchant profits and indirectly raise costs for consumers. Stablecoins are beginning to challenge this system by offering lower-cost alternatives.

This article examines the burden of credit card fees, the advantages of stablecoins, how they are currently being adopted in the industry, and how they could reshape the financial landscape in the years ahead.

The Cost of Credit Cards

Credit cards remain the most widely used payment method across the globe. Their convenience is undeniable, but they come with hidden costs. Each swipe or tap triggers interchange fees paid by merchants to banks, network fees collected by companies such as Visa and Mastercard, and additional processing charges. Together, these add up to between 1.5% and 3.5% of the transaction.

For businesses ranging from small shops to large retailers and airlines, these expenses are substantial. To compensate, many raise prices, passing the costs back to consumers. The current structure leaves merchants with little control and rewards the payment networks that dominate the system.

Stablecoins, by contrast, are pegged to traditional fiat currencies like the US dollar and allow near-instant transactions with minimal fees. By removing intermediaries, they provide merchants with more revenue while creating the possibility of cheaper goods and services for consumers.

Understanding Stablecoins

Stablecoins are a form of cryptocurrency designed to maintain a consistent value. Unlike Bitcoin or Ether, which fluctuate widely, stablecoins are backed by reserves such as cash and US Treasury securities, ensuring that one token remains close to one dollar in value. They merge blockchain technology’s efficiency with the trust of traditional assets, making them suitable for everyday commerce.

USDC, issued by Circle, is one of the most widely recognized stablecoins and operates under strict regulatory frameworks. It publishes third-party attestations of its reserves to reassure users of its reliability. In December 2024, Ripple introduced Ripple USD (RLUSD), gaining approval from the New York Department of Financial Services before launching on global exchanges. By anchoring themselves to the US dollar and operating transparently, such stablecoins are positioned to challenge the payment systems built on credit cards.

Stablecoins vs. Credit Cards: Why They Matter

Stablecoins address two persistent issues with credit cards: costly transaction fees and slow settlement times.

Credit card payments appear instantaneous to consumers, but merchants often wait one to three business days for funds to clear. During this waiting period, banks and networks still deduct their fees, leaving businesses with reduced margins. Stablecoins, in contrast, settle within seconds or minutes on blockchain networks. The cost is only a fraction of what credit card companies charge.

This is why large retailers, airlines and e-commerce companies are exploring stablecoin adoption. By reducing dependence on Visa and Mastercard, they gain more control over their revenue and still have the ability to run loyalty programs. Blockchain systems also enable new kinds of reward points that retain real-world value and can move across platforms, enhancing both customer satisfaction and merchant profitability.

How Stablecoins Are Being Used in the Credit Card Space

The battle between stablecoins and credit cards is not simply about lower costs. It also reflects a broader shift in how businesses interact with consumers. Companies are experimenting with hybrid models that combine elements of both systems, blending the trust and familiarity of traditional payments with the efficiency of blockchain.

Gemini and Ripple’s Moves

On August 25, 2025, Gemini announced the launch of the XRP Credit Card, developed in partnership with Ripple. The card offers up to 4% cashback in XRP for gas, electric vehicle charging, and rideshare purchases, capped monthly. Dining earns 3%, groceries 2%, and all other purchases 1%. Rewards are instantly delivered in cryptocurrency. The card charges no annual or foreign transaction fees.

Gemini also adopted Ripple USD (RLUSD) as the base currency for all US spot trading pairs, simplifying conversions. Ripple further strengthened this ecosystem by acquiring Rail, a payments platform, for $200 million. This acquisition expanded Ripple’s services with tools for cross-border transactions, virtual accounts and automation.

Retail and E-Commerce Experiments

Air Shop, which is scheduled to launch in September 2025, represents another innovative use case. The platform integrates stablecoin-based loyalty systems that solve one of the biggest problems with traditional rewards programs: lack of flexibility. Its Stable-Points (AIR SP) are tokens backed by US dollars, designed to maintain their value unlike traditional loyalty points that can expire or lose worth.

These Stable-Points can be redeemed at over two million merchants through BookIt.com, covering travel, dining, retail and luxury services. Air Shop allows customers to transfer rewards across brands, making them more useful and reliable. Merchants benefit from a transparent, cost-efficient way to build loyalty, while consumers gain real financial value.

The $100-Billion Opportunity Ahead

In 2024, credit cards accounted for 35% of all US transactions, representing $5.51 trillion in purchase volume across 56.2 billion Visa and Mastercard transactions. This system extracts over $100 billion annually from merchants in the form of fees.

Stablecoins have the potential to change this landscape entirely. They offer low-cost transactions, instant settlements, and innovative reward structures. If they capture even 10% to 15% of the market, the resulting savings for merchants and consumers could reach billions of dollars each year.

As more retailers, airlines and e-commerce platforms adopt blockchain-based payments, pressure on traditional card networks will grow. Stablecoins could transition from niche instruments into essential components of the US financial system, providing both economic efficiency and broader blockchain adoption.

Conclusion

The rivalry between stablecoins and credit cards is not only about how payments are processed. It represents a fundamental contest over who will control money flows in the digital economy. Stablecoins, supported by increasing regulatory clarity and institutional backing, provide faster, cheaper, and programmable alternatives that appeal to both merchants and consumers.

Ripple’s RLUSD and Gemini’s new products illustrate how cryptocurrency companies are embedding themselves into mainstream commerce. At the same time, retailers such as Amazon and Walmart are considering their own stablecoins to reduce costs and reinvent loyalty systems. If these initiatives succeed, they could redistribute billions of dollars across the economy and redefine consumer engagement.

Credit cards remain dominant, but the momentum behind stablecoins continues to grow. As adoption increases, stablecoins are likely to become a central pillar of American payments, reshaping the $100-billion financial landscape and changing how businesses and customers interact.

Frequently Asked Questions

What makes stablecoins different from credit cards?

Stablecoins allow direct digital transactions backed by fiat currencies like the US dollar, settling within seconds at very low cost. Credit cards, while convenient, impose fees of 1.5% to 3.5% and require settlement periods that can take several days.

How much do US merchants currently pay in credit card fees?

Merchants in the United States collectively pay more than $100 billion every year in card processing fees to banks and networks like Visa and Mastercard.

Which companies are leading the push for stablecoin adoption?

Ripple and Gemini are at the forefront, with innovations such as Ripple USD (RLUSD) and the XRP Credit Card. Other platforms like Air Shop are also entering the market with stablecoin-powered loyalty systems.

Can stablecoins replace credit cards completely?

It is unlikely in the near term. Credit cards are deeply embedded in the financial system. However, stablecoins are gaining ground by offering cheaper, faster alternatives and may capture a significant share of the payments market.

What is the potential market impact if stablecoins grow in adoption?

If stablecoins secure 10% to 15% of the US payments market, they could redirect billions in savings back to merchants and consumers, pressuring traditional card networks and accelerating blockchain adoption.