Exploring stablecoins as the future of seamless global e-commerce transactions
Today, businesses face a dilemma: while cryptocurrencies offer several advantages, such as lower fees, faster transactions, and global accessibility, they also present risks such as uncontrolled volatility and security concerns, both critical factors for consumers. This is confirmed by a study published in mid-2022, which shows that 50.6% of online shoppers view cryptocurrencies as the future of payments, while the latest survey of 4,000 people in the United States shows that less than 1% identify them as their preferred online payment method.
In this context, key questions arise: Should e-commerce businesses integrate cryptocurrencies as a payment solution or is it just a passing fad? Could stablecoins provide a more reliable way forward? Let’s analyze this and the main aspects that e-commerce companies should consider regarding the adoption of cryptocurrencies.
The role of cryptocurrencies in today's e-commerce
There are some platforms that use digital assets as a means of payment. A recent study shows that the e-commerce and retail sector has the largest number of companies offering cryptocurrency payments, totaling 76 businesses successfully leveraging this technology. In fact, the integration of cryptocurrencies into business processes is already evident, although it has not yet become widespread, indicating that its adoption in e-commerce is in its early stages.
Although the adoption of cryptocurrencies by e-commerce businesses is still in its infancy, companies with a global customer base have already begun to leverage the benefits of cryptocurrency transactions. Even so, it mainly refers to large companies, as 85% of them, with annual revenues exceeding one billion dollars, already accept cryptocurrencies.
In contrast, in the case of medium retailers, which generate between $250 million and $1 billion, only 23% have adopted cryptocurrency payments. However, they easily accept payments from international customers without having to deal with exchange rates, lengthy transaction processes, or high fees, unlike traditional payment methods.
For example, one of the e-commerce platforms, Shopify, actively integrates cryptocurrency payments and allows merchants to accept digital transactions from customers worldwide through global payment gateways. Given the recent positive attitude of governments, these cases are expected to increase.
However, businesses face some challenges: the value of some cryptocurrencies can fluctuate significantly over short periods, which poses a significant concern for merchants due to the inability to establish a stable pricing policy. In this regard, stablecoins can be considered a solution for businesses in the e-commerce sector.
Stablecoins: the most viable option for e-commerce?
Stablecoins are among the best options for e-commerce businesses, as they preserve the benefits of cryptocurrency payments while offsetting the risks of volatility. In addition to mitigating risks, stablecoins are also more transparent and secure for the public, which enhances trust. For example, Circle, the issuer of USDC, is required to provide monthly certification reports prepared by independent accounting firms, reinforcing user confidence in its transparency.
The potential for widespread adoption also depends on ongoing regulatory reviews, which play an important role in establishing clear guidelines. For example, recently, the U.S. House of Representatives introduced an updated version of the STABLE Act, which substantially revises the draft from the previous month.
The new version seeks to support stablecoins by introducing new compliance mechanisms, expanding regulatory oversight, and potentially creating a federal framework for the issuance of payment stablecoins. Therefore, as regulations are implemented, e-commerce companies could be among the first to offer stablecoins as a payment method to stay ahead in the market, which could significantly impact the growth of the sector and attract considerable attention.
Moreover, stablecoins can be integrated into existing payment services. For instance, PayPal has already begun adopting cryptocurrencies as part of its services, and it is likely that others will follow suit soon. This is mainly because companies do not need to restructure their payment infrastructure to successfully implement stablecoins, which is quite easy. Additionally, by using stablecoins through robust platforms with advanced cybersecurity mechanisms, companies could reduce risks and prevent fraud.
Finally, stablecoins can open access to new markets for consumers in regions with limited banking infrastructure. In 2021, in its report, the European Parliament emphasized that stablecoins can have a positive impact on global trade, facilitate the development of global payment systems, and improve financial inclusion in both developed and developing countries. Therefore, this confirms that the adoption of stablecoins by e-commerce companies could play a crucial role in expanding their reach.
In summary
The integration of cryptocurrency payments in e-commerce should not be seen as a trend, but as a strategy that could transform digital commerce. It is expected that, within 5 to 10 years, stablecoins will become a standard for cross-border payments and transform the way businesses and consumers conduct digital transactions.
Stablecoins, being consistent and backed by assets, offer businesses protection against excessive volatility, seamless integration with existing payment services, and the ability to expand into regions with limited financial infrastructure. However, companies must consider robust security mechanisms, transaction management, and regulatory compliance to effectively leverage this payment method.
Opinion of Vitaliy Shtyrkin, Director of Products at B2BINPAY.