Stablecoins Need to Get Behind Cards, Not Replace Them

The stablecoin industry has spent possibly too much time trying to reinvent checkout.

Consumers already have a nearly universal interface for turning balances into purchases. Their cards. Merchants already accept them, networks already route them, all while banks and processors already know how to handle fraud, disputes and chargebacks around them.

That puts cards at the center of the stablecoin opportunity in consumer payments.

“If you look at stablecoins without cards, it’s very hard to spend them,” Paymentology Chief Technology Officer Tim Joslyn told PYMNTS. “Cards solve the acceptance problem.”

“I don’t think of them as separate things; one is an enabler of another,” Joslyn added, noting that “demand isn’t the problem. It’s the plumbing.”

He pointed to research showing that 42% of stablecoin holders want to use them for major purchases, compared with 28% who actually do.

Closing that gap may not require convincing millions more consumers to consciously “pay with stablecoins,” Joslyn said.

It might just require making stablecoins practically invisible, where instead of replacing card networks at checkout, stablecoins use them as the last mile and serve as the infrastructure moving money behind the card.

Cards Already Solved Stablecoins’ Hardest Adoption Problem

Cryptocurrency payments have frequently been treated as an acceptance problem. Persuade enough consumers to pay with digital assets, persuade enough merchants to accept them, and eventually create a viable network. But the stablecoin opportunity today is almost the inverse of that disruption story. By contrast, rather than legacy infrastructure waiting to be disrupted, card networks are becoming a distribution layer for stablecoins.

“From a consumer perspective, they don’t want to know what’s underneath,” Joslyn said.

The same holds for the rest of the ecosystem. The merchant does not necessarily need to accept USDT, USDC or another digital currency. The merchant needs to accept the card credential attached to that balance.

It is an adoption model hiding in plain sight. Stablecoins become useful at retail precisely when paying with them stops feeling like paying with stablecoins.

The Bigger Opportunity Is Funding, Not Checkout

Once acceptance is separated from funding, the question changes. It is no longer whether stablecoins create a better checkout than cards, but whether they create a better way of getting money behind the card.

“There’s how you send money, and there’s how you spend money,” Joslyn said.

Cards have largely solved spending. Stablecoins could have a stronger advantage in sending.

“It’s simple, it’s always on. It’s seven days a week. It’s 24 hours a day,” Joslyn said. “You’re not waiting. You sent a payment on a Saturday, and you’ve got to wait until a Monday or Tuesday for it to be processed because the banks aren’t working.”

“People aren’t spending crypto for the sake of spending crypto,” Joslyn added. “There has to be a reason that they’re … doing it in the first place. For most of our customers, that reason is cross-border.”

Even outside of transactions that are complex and international, cards offer established processes for when payments go wrong, something blockchains were never designed to provide.

“You don’t need to be able to have reversible blockchain,” Joslyn said. “You need to have signed-up parties and a process that says, ‘If A or B happens, these are the rules that govern, and this is who’s liable, this is where funds need to flow backwards or forwards again.’ It is across process where the work needs to be done. The technology is already there.”

One Card, Many Forms of Money

Take that architecture further and the distinction between stablecoin, debit and credit cards begins to disappear.

“I think it’s one card, but it’s many balances, and … you won’t care where those balances will come from,” Joslyn said.

A single credential could eventually connect to checking, credit, stablecoins and other stores of value, with software determining which balance funds each transaction.

The card becomes less an extension of one account than a router across money.

That creates a more consequential competition than cards versus stablecoins: which bank, wallet, stablecoin issuer or platform controls the balance closest to the transaction, and the software deciding how it gets funded.

Watch the full PYMNTS interview with Paymentology Chief Technology Officer Tim Joslyn to hear more about:

• Why stablecoins may win payments without replacing cards. Cards have already solved merchant acceptance, allowing digital currencies to compete as the invisible funding layer behind a payment rather than as a new checkout experience, Joslyn said.
• Why the real stablecoin opportunity may happen before the purchase. The strongest economics are in cross-border funding, where always-on digital currencies can move value into spendable balances without waiting for traditional banking hours, Joslyn said.
• Why the future wallet could be one credential connected to many forms of money. Joslyn said he sees cards evolving into an interface across stablecoin, debit, credit and other balances, with real-time orchestration deciding where the funds come from while consumers barely notice the infrastructure underneath.