How Business Groups Are Pushing for Stablecoin Acceptance

A leading merchant association and a group representing stablecoin interests early Thursday threw their weight behind efforts to bring stablecoins into the payments mainstream in the United States. The move by the Merchant Payments Coalition and the Payment Choice Coalition seeks to “promote their shared goals of enhancing innovation, competition, and choice in U.S. payments,” the two groups said in a statement.

The MPC argues stablecoins, which is cryptocurrency whose value is tied to a fiat currency such as the U.S. dollar, would represent an innovative approach to making retail payments more efficient. The MPC has long lobbied against what many merchants view as the inordinate cost of card acceptance. By contrast, stablecoins “represent a much less expensive proposition for merchants on a per-transaction basis,” says Aaron McPherson, principal at AFM Consulting, in an email message to Digital Transactions News.

Estimates of acceptance costs for digital currencies like stablecoins vary, while spotty retail acceptance has made it difficult for experts to arrive at associated costs. “The cost to establish acceptance of stablecoins may be a barrier for some merchants, because they would have to integrate wallets into their existing checkout systems, but today’s technology stack should make that easier,” figures McPherson.

Merchants and consumers may favor the coins because of their steady values compared to crypto alternatives such as Bitcoin. And experts like McPherson say the latest move by the MPC and the PCC shouldn’t be underestimated, as it is “both a big step forward for stablecoins and a way to bring down the cost of acceptance compared to credit cards,” he notes.

The MPC says it is backing legislation “to provide a solid, reliable regulatory structure for stablecoins” while the PCC is looking “to ensure a competitive payments landscape,” according to the joint statement from two groups.

Merchant groups have long decried the cost of card acceptance and looked for ways to temper that cost. The MPC along with other merchant groups has backed the Credit Card Competition Act, legislation aimed at moderating credit card acceptance costs by requiring processors to offer a choice of networks.

The PCC represents small businesses and trade associations, as well as companies involved in working toward regulation of stablecoins. It advocates for the coins as a means “to provide more efficient and reliable payments,” the group says.

Stablecoins, like other digital currencies, remain a fringe payment method, though their very stability of value sets them apart in contrast to the sometimes wild swings in value holders of coins such as Bitcoin have experienced. The largest stablecoins are Tether, with a market capitalization of $143.3 billion, and USDC, at $58.5 billion, according to Coinmarketcap, an online ranking of cryptocurrencies.

Still it remains unclear for the time being at least how many merchants would be willing to accept the coins, and how soon. “Merchant acceptance of stablecoins is absolutely crucial for them to get traction in the U.S.,” notes McPherson. However, they could be capable of catching on with the general public, he notes, adding “they are already popular in African countries.”