2 PAYMENT METHOD PROFILES: STABLECOIN
Characteristics
Credit/Debit Functionality It may not be common to see stablecoins as an accepted payment method, but household- name brands, Visa and Mastercard, are partnering with crypto exchange and software companies to create prepaid, debit and even credit cards for crypto users to more easily use their cryptocurrency wherever Visa and Mastercard are accepted. Examples of these include: • Crypto.com’s Visa prepaid card where a user can add funds to the card via the app by converting their crypto. • MetaMask’s Mastercard debit card where a user can directly spend their crypto balance which are instantly converted to fiat when the transaction takes place. 712 713 714 • Nexo’s credit card where a user can borrow against crypto-backed credit lines. 715 Each of these examples is similar to credit and debit cards backed by fiat currency regarding fees for both consumers and merchants. 716 717 718 Changing what currency is being accessed via cards is innovative but also may not increase competitive leverage for merchants in payments acceptance. BillPay/Recurring Payments BillPay options are available for stablecoins users through various cryptocurrency payment processors including BitPay. This allows a consumer to pay bills directly using their crypto wallet. 719 Regarding recurring payments, it will be challenging for a merchant to charge a user’s crypto account given stablecoins operate as a “push” transaction meaning the payer must push the funds to the payee. 720 However, crypto wallet/gateway Crypto.com advertises a way to set up recurring payments for their users using the app. 721 Settlement Time As mentioned before, stablecoins utilize blockchain technology. A transaction using stablecoins as the payment method can be considered settled once it is recorded on a blockchain. With over 1,000 in existence, 722 blockchain networks provide options for stablecoins users to complete their transactions. Settlement times can vary by network and are dependent on factors such as network congestion, block propagation time, and transaction fees. 723 A stablecoin’s ability to operate on multiple blockchain networks could mean a quicker settlement time given more routing opportunities.
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