The Power of Stablecoins – Boosting E-Commerce Payments and Opening Doors for Retailers in Crypto
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Stablecoins are already becoming a mainstream digital tool for everyday use. Now, both companies and regular users utilize them for payments.
In Singapore, for example, the stablecoin payment value reached $1 billion a few weeks ago, once again proving that they are becoming a key solution for businesses and e-commerce is no exception.
This is no surprise as stablecoins bring vast amounts of benefits compared to traditional fiat payments and volatile cryptocurrencies.
So, when thinking about streamlined payment methods for businesses, stablecoins are what come to mind.
But how exactly can they be used in the e-commerce industry, and why are they a better alternative for traditional payment methods? The questions must be answered.
The status quo of cryptocurrency in e-commerce
Despite crypto adoption being still uneven, there is, in fact, a huge progress, and its broader use seems inevitable.
A data-driven look
If we look at statistics, such as a recent study by Deloitte, we can see that 64% of consumers are interested in using cryptocurrencies and stablecoins as payment options.
VISA also reported $4.2 billion in crypto payments processed via its crypto-backed cards in the first quarter of 2023, demonstrating increasing consumer demand.
The indicators for crypto adoption among younger generations are even more promising, with 40% of people aged 18-35 planning to use cryptocurrency, and 10% intending to use it regularly.
Moreover, 31% of them expect to make consistent crypto payments in the next 12 months.
As for businesses, around 74% of retailers say that they’re considering starting to accept crypto payments in the next two years.
Global momentum
Importantly, at a global level, new players like China and Russia have already started exploring unified crypto regulations through the BRICS alliance.
Meanwhile, countries like the USA, Canada, Australia, the EU, Israel and the Central African Republic are still leading the way.
Why stablecoins are ideal for e-commerce
Stablecoins, as mentioned above, offer significant advantages, making them an attractive option for seamless e-commerce payments.
1. Low volatility
While the volatility of cryptocurrencies can be an advantage in some markets, it makes them less practical for everyday use.
Stablecoins in turn are tied to values of fiat currencies like the US Dollar or Euro, which reduces their volatility, giving them a huge advantage and a crucial factor for businesses.
This lack of volatility allows them to lock in profits without the risk of sudden value fluctuations, so they can rely on stablecoins as a payment option.
2. Faster and cheaper transactions
Stablecoins, once largely confined to ‘traditional’ blockchains like Ethereum, have now expanded far beyond.
Blockchains such as Polygon, Solana, Avalanche, Optimism and Algorand already support stablecoins like USDT and USDC, making payments much faster and cost-effective.
Taking for example Solana, its average transaction fees are 900 times cheaper than Ethereum, charging 0.000014 SOL or $0.00189 per transaction, or Polygon which completes transactions in approximately two seconds per block with an average transaction cost of just $0.015.
3. Simple and stable entry point into digital payments
Many people can find using cryptocurrencies daunting, as their nature is not fully clear for them.
However, thanks to their expansion into various blockchain networks, stablecoins are now more accessible and practical for a broader range of businesses as they are easier to be integrated into payment systems.
They are a key solution for many challenges associated with traditional payments, such as chargebacks, delays and high transaction fees, which is highly beneficial for e-commerce.
4. Eliminated conversion and exchange rate fluctuations
Perhaps the most critical advantage for e-commerce businesses is the elimination of conversion and exchange rate fluctuations.
Stablecoins maintain a consistent value, sparing businesses the costs and uncertainties of currency conversion.
This feature is especially appealing to companies with a global customer base, as it simplifies cross-border transactions.
What’s next for stablecoin adoption in e-commerce
The regulatory framework of cryptocurrencies remains the biggest challenge for widespread crypto adoption nevertheless, the progress is accelerating.
More countries are adapting their regulations to support both business and consumer use of crypto.
This is especially true for stablecoins and particularly for USDC which is now a fully regulated stablecoin that offers businesses a secure and compliant option for their payment needs.
It is for sure that digital assets are being increasingly viewed as an inevitable future, and examples such as Singapore prove this point.
With this we are also already witnessing the emergence of new stablecoins, and in the future, we can expect them to possibly be tied to assets other than fiat currencies.
Conclusion
The future is digital, and cryptocurrencies lead by stablecoins are the integral part of that future.
Stablecoins already offer solutions to the inefficiencies of traditional payment systems, and their widespread adoption is just a matter of time.
As more e-commerce businesses seek fast, stable, secure and cost-effective payment alternatives, stablecoins will continue to gain traction.
Vitaliy Shtyrkin is the chief product officer at B2BinPay, an all-in-one crypto ecosystem for business. He is a product lead with 15 years of experience in the financial market, particularly within the fintech sector, and is dedicated to enhancing digital asset management operations.
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Author: Vitaliy Shtyrkin
