Are stablecoins e-commerce’s next big thing?

Stablecoins have been stealing the spotlight in e-commerce lately.

Amazon and Walmart are reportedly developing their own stablecoins, while Shopify has linked up with Coinbase and Stripe to offer stablecoin payments to merchants globally.

Issuing corporate stablecoins could save big retailers billions of dollars in exchange and processing fees, Tobias Pfütze, co-founder of Originate Capital, told Retail Brew via LinkedIn. However, the pending Genius Act, a bill to regulate cryptocurrency payments in the US, needs to draft clear rules for dollar-pegged stablecoin issuance.

“The economics are compelling,” Pfütze said. “Credit card interchange fees can reach 3.5% per transaction, while stablecoin transactions cost as little as 0.1% in blockchain network fees. With Amazon’s $638 billion in annual revenue and Walmart’s $100 [plus] billion in e-commerce sales, even small percentage improvements in transaction costs translate to massive savings.”

Overseas transactions: Unlike traditional banking options, stablecoin networks are available 24/7, which can make cross-border transactions, an important chunk of online retail, easier.

“This enables real-time, cross-border transactions without the friction of currency conversion or banking intermediaries,” Pfütze added.

Meanwhile, Shopify is making its own push into crypto payments: "Shopify is making stablecoins work for real-world commerce,” wrote Mani Fazeli, VP of product, in an email. Shopify merchants can choose between fiat and stablecoin settlements without additional charges or foreign exchange fees, providing “more choice and flexibility with borderless commerce.”

Stablecoins could also come in handy for complex retail payments, which sometimes need to account for returns, delays, and taxes.

In addition, Pfütze said, stablecoins could offer the retail industry a payment universe that works everywhere. “A retailer-branded stablecoin could work seamlessly across online and offline channels while integrating directly with existing loyalty programs. This creates a unified payment ecosystem that potentially improves the overall shopping experience.”

Zoom out: The pending Genius Act in the US would lay out regulatory guidelines for corporate stablecoin issuance, eliminating uncertainty that has previously kept large retailers from entering the space.