Giants like Amazon, Apple, Meta, PayPal, and Uber are all exploring this emerging field.
Written by: Ben Weiss, Leo Schwartz
Translated by: Luffy, Foresight News
Dara Khosrowshahi, CEO of Uber
In June of this year, Uber CEO Dara Khosrowshahi announced that the ride-sharing giant is considering using stablecoins as a method of global fund transfers. If tech giant executives had made such statements a year ago, it would have seemed absurd. But now, from Apple to Amazon, not to mention major banks and brokerages, everyone is rushing to embrace stablecoins—a cryptocurrency pegged to assets like the U.S. dollar. What has changed?
Most notably, the regulatory environment in Washington, D.C. has undergone a significant shift. The Senate has passed a bill that is currently under consideration by the House, which will clear obstacles for stablecoins to be integrated into the financial system.
Crypto advocates also argue that the commercial prospects for stablecoins are widening. Unlike more volatile cryptocurrencies like Bitcoin and Ethereum, stablecoins are expected to become a more efficient payment method, capable of sending digital dollars at near-instant speed and lower costs. This could fundamentally change the way businesses handle global fund management and pay salaries to global employees and contractors.
However, since this technology is still in its early stages and the regulatory outlook is unclear, analysts interviewed by Fortune magazine are skeptical about whether Silicon Valley tech giants will widely adopt stablecoins in the near future.
Operating costs
For companies like Amazon, the cost of transferring funds globally is high. According to its 2024 annual report, international business net sales accounted for 22% of last year's total revenue of nearly $143 billion. These sales are priced in local currencies, meaning the company must consider foreign exchange risks and currency fluctuations, which could result in losses of billions of dollars.
Nick van Eck, CEO and co-founder of stablecoin startup Agora, pointed out that global fund management is one of the advantages of stablecoins, being able to convert local currency to stablecoins and remit it back to the U.S.
Agora allows companies to issue their own dollar-backed stablecoins. Nick van Eck told Fortune magazine that while Agora's current clients are mostly cryptocurrency companies, his ideal clients are multinational corporations like PepsiCo, which have dozens of bank accounts and corporate entities around the world, along with thousands of suppliers. "Stablecoins can significantly improve their capital efficiency," he said, "Now you can transfer $100 million from one country to another in a second, without waiting for days."
Agora is not the only startup hoping to profit from the stablecoin boom in Silicon Valley. Over the past year, numerous stablecoin startups, including Mesh, Bastion, and BVNK, have raised tens of millions of dollars from venture capital firms. Last October, payment company Stripe completed a milestone acquisition of stablecoin startup Bridge for $1.1 billion.
Stripe serves half of the Fortune 100 companies and offers a variety of payment products, including helping businesses automate customer billing, providing pre-built checkout systems, and facilitating global remittances. Co-founders Patrick Collison and John Collison praised stablecoins in a recent annual letter to investors, stating that these assets will help large enterprises expand more quickly globally and bring other benefits.
"Why should I pay with stablecoins?"
Colin Sebastian, an analyst responsible for Amazon research at Baird, told Fortune magazine that major companies have been looking for financial tools or payment methods that can help manage expenses or reduce friction. "Traditional credit card payments are quite expensive," he said, "and of course, the fees for cross-border transactions are even higher."
However, while Amazon and other multinational companies may have economic incentives to try adopting stablecoins, convincing consumers to use the technology for payments will be trickier. "What can really drive a change in consumer behavior?" Sebastian asked, "Credit and debit cards are already very popular."
Maxim Group analyst Thomas Forte, who focuses on consumer internet companies like Amazon and Apple, agrees with Sebastian. He believes the most reasonable use of stablecoins for Amazon is to accept customer payments through stablecoins, thereby reducing transaction costs. "What I'm struggling with is: as a U.S. consumer, why should I pay with stablecoins?" Forte asked.
Agora co-founder Van Eck believes that, at least before stablecoins gain wider adoption in the U.S., countries with more volatile currencies are most likely to embrace this technology, as consumers in those countries have more motivation to try more stable payment methods. He recalled a recent example of funding from angel investors outside the U.S.: one fund took 10 business days to arrive, while another took 22 business days. "This situation is very common, not just for individuals, but for multinational businesses as well," he told Fortune magazine.
For example, in Argentina, inflation has persisted for more than 15 years, and the country's currency has plummeted against the dollar. Therefore, it is not surprising that from June 2023 to July 2024, stablecoin trading volume in Argentina accounted for nearly 62% of the country’s cryptocurrency trading volume. According to a Chainalysis report in 2024, the global average is about 45%.
Nic Carter, founding partner of crypto venture capital firm Castle Island Ventures, said, "I am more focused on businesses that truly solve problems for enterprises, like helping businesses in Nigeria pay someone in the Philippines."
Nevertheless, large tech companies in the U.S. remain enthusiastic about this technology and have already taken action to enter this emerging field. PayPal has launched its own stablecoin. Online brokerage firm Robinhood and payment giant Mastercard have joined an alliance that allows members to mint or create stablecoin USDG. Companies like Amazon, Apple, and Meta have also begun exploring the use of stablecoins for payments.
Meta previously declined to comment on its stablecoin plans. Spokespersons for Apple and Amazon have not yet responded to requests for comment.
Baird analyst Sebastian stated that as Congress is nearing completion of regulations on stablecoins, there is almost no downside for large tech companies to experiment with this new technology. "A common trait among many large tech companies is that they are very willing to try new things."