The past several weeks have been filled with positive news around stablecoin adoption:

• Senate passes GENIUS stablecoin bill, providing a regulatory framework for stablecoin adoption and usage in the US. It still needs to be voted on by the House 🤞

• Circle, the issuer of the USDC stablecoin, IPO’ed 2 weeks ago at $31 and recently tapped $200 with a chart outperforming 99.99% of memecoins

• Retailers like Walmart and Amazon are actively looking into offering their own stablecoins

• Tech companies such as Apple, X, and Airbnb are actively looking to integrate stablecoins into their respective platforms and products

• Major US banks are considering launching a joint stablecoin

At this point, if you’re a Fortune 500 and not actively looking into stablecoin adoption or integration, you’re probably in the minority.

Even though crypto adoption isn’t looking like how some of us imagined (ahem plz save my underwater nft bags 😭), we’re getting it! And the reasons for it have been themes some of us have been repeating over and over again for years, if not decades.

Simple, it’s more efficient. And when I say more efficient, it’s faster, cheaper, and more scalable.

Faster

Card transactions take days to finalize due to cutoff windows, weekend and holiday gaps, and process batching. Ever had to put down a deposit for a hotel stay and wait several days for the $200+ hold to disappear? Maybe it’s my OCD mindset, sigh.

Stablecoins settle in seconds (if not less), and that capital is stuck in transaction purgatory waiting to become productive again.

Cheaper

Card transactions involve multiple parties:

• Merchant: Walmart, Amazon, your local coffee shop

• Issuing Bank: The consumer’s bank

• Acquiring Bank: The merchant’s bank

• Card Network: Visa, Mastercard, Discover, which help facilitate the transaction between the issuing and acquiring bank

• Payment processor: Stripe, Square, PayPal, etc., which help to facilitate the transaction between parties

These parties all have an important role and each applies a fee for every transaction, which end up being around ~1-3% based on a variety of factors. Merchants eat that cost, and ultimately increase their prices and consumers end up paying. In short:

Sam Broner from a16z presents the benefits of stablecoin transactions nicely, pointing out how this benefits all of these involved parties.

Scalable

Making a $100,000 purchase? Need to make an international transaction halfway around the world? The gas costs remain a fraction of a cent and stablecoins can be used regardless of location.

The articles I linked above and all the recent headlines have been around retailers, platforms, and financial institutions. But what about consumers?

It makes sense that the end user hasn’t been brought up yet because we need to get the big players who have the distribution firepower to get onboard first. And TBH, I think they’re still figuring out how to communicate this to their respective audiences.

The benefits for consumers not based in the US or developed countries are clear. A digital dollar is a no-brainer if your local currency is inflating faster than Circle’s price, or if you need to send money overseas regularly. And everyone else?

I think we’ll see an evolution of how consumer incentives will evolve with the introduction and integration of stablecoins as a payment method. And the nice thing is, we’re not reinventing the wheel here. We’re simply adding another spoke or changing the rims to be more flashy 🛞

Here’s 7 ways I think stablecoins will be introduced to the public and how they will incentivize adoption, passing along some of the benefits to consumers. Companies should and will be…incentivized (heh) to make this a win-win with consumers, creating a new dimension around incentives, payment methods, rewards, and benefits will look like.

Note that these are hypotheticals and may have some legal or regulatory considerations. But as the saying goes, show me the incentive and I’ll show you the outcome. And the incentives are pretty damn big.

Every company listed in the first paragraph has some form of a rewards or incentive program to increase sales, transaction volume, or retain users.

I like to pick on Chase’s Sapphire credit card program because I am a Chase Sapphire Reserve (CSR) cardholder. Also, they are revamping their program which will launch next week.

What are they doing? Well…they’re increasing their annual fee to $795, holy shit.

BUT…you get all these AWESOME perks you get to brag about to your friends because that’s what life’s about, right?

• (❗️NEW) 8x points on Chase Travel for flights, hotels, etc.

• (❗️NEW) 4x points on non-Chase airline and hotel purchases

• (❗️NEW) Up to $500 credit for The Edit hotel and resorts bookings

• $300 credit for travel purchases

• Access to the Chase Sapphire Lounge Network at airports around the world

• (❗️NEW) IHG One Rewards Platinum Elite status

• (❗️NEW) $300 annual dining credit for restaurants that are a part of the Sapphire Reserve Exclusive Tables program

• And countless other existing and new perks

I’m listing these to show how perk heavy these premium credit cards are now, to the point where I may cancel the card because I didn’t sign up for a ‘make your credit card worth the $8,500 annual fee’ scavenger hunt.

Sorry, didn’t mean to rant about the weird path credit cards rewards programs have gone down. Black Mirror needs to make an episode about this.

The point is there are a couple of opportunities for stablecoin integration into these bank-issued credit cards:

• Ditch the word points and replace it with dollars, the Chase Dollar

• Earn X% back on purchases made with Chase Dollars

Credit card rewards programs are all about incentives, and adoption will come if the incentives are appealing enough. These programs certainly know a thing or two about that.

Cashback platforms are another clear as day wedge for stablecoin (and wallet) integration.

These platforms direct traffic to retailers who offer X% cash back deals, promotions, and sales. Some of these retailers have different cash back offers based on the purchase category.

These cashback platforms could integrate stablecoins in multiple ways

• Increase the cashback reward for any purchase made with stablecoins

• Partner with merchants for stablecoin-specific deals and promos

• Introduce their own stablecoin Rakuten Bucks (plz don’t use that name lol)

• Introduce a Rakuten wallet to store the Rakuten Bucks

• Add a bonus multiplier in Rakuten Bucks when your selected payment method is the Rakuten wallet vs. the current options of a physical check, PayPal, or AMEX rewards points

Should consumer receive more benefits for stablecoin usage? If so, share or subscribe!

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In addition to my CSR card, I also have a Chase Amazon Prime credit card which is fortunately much more straightforward. The biggest perk is I get 5% back on all my Amazon purchases, yippee!

At some point in the last year or so, I noticed that Amazon introduced another incentive, a 6% back offer on select items if I choose a slightly delayed shipping option.

If Amazon is already implementing incentives to encourage users to choose shipping dates to optimize their shipping ops + logistics, they certainly can incentivize them to use other types of payment methods as well, like Amazon Dollars.

As merchants start rolling out their own stablecoin programs, it will be a hefty rollout and go-to-market effort. However, the reality is if positioned thoughtfully, it won’t be hard for consumers to grasp what stablecoins are and why they’re better. They’re essentially a supercharged gift card program, and we know how those work.

They’re dollars that can be used within that merchant’s platform, or the web2 version of stablecoins on a closed network.

If merchants like Amazon are incentivized to increase stablecoin transaction volume for reduced costs and increased margins, they could create new programs to promote adoption and usage:

• Create a cashback bonus like the Amazon Day 6% cashback incentive above

• Create a volume based bonus, eg: Make 10 Amazon Dollar purchases and receive X incentive, Make $1,000 in Amazon Dollar purchases and receive X incentive

• Create a habit-based bonus, eg: Reload your Amazon Dollar balance 10 times with $100+ reloads and receive X incentive

Gift card related incentives aren’t new, but now there’s even more incentive beyond the purchase of the gift card itself.

On top of that, I wouldn’t be surprised if gift card purchases paid in fiat will be redeemed as merchant-specific stablecoin dollars in the near future.

With faster transaction finality and lower fees/higher margins, vendors and affiliates downstream of the platform benefit as well.

Optimistically, this has a positive tricke-down effect with more capital reinvested into customer acquisition and retention with better incentives. And if one platform and its network doesn’t do it, another one will in its stead, implementing a richer incentive program via stablecoins.

Similar to cashback platforms, there is a stablecoin and wallet opportunity. Instead of providing cashback from transactions, these platforms provide payouts or rewards to users for completing surveys or specific tasks.

Payment methods have improved over the years to PayPal accounts or giftcards, but nothing beats (digital) cash.

One rewards platform I stumbled upon earlier this week is EarnOS, which incorporates wallets and stablecoins for payouts. It’s currently in beta, but provides an idea of what a modern rewards app using stablecoins could look like.

Going back to the traditional gift cards as a payout method, merchants could create redemption bonuses for stablecoin-specific payouts as another incentive opportunity.

The refund process sucks, and I have a personal and timely example of this. I was supposed to go to a comedy show tonight, but yesterday I received an email notifying me that the event was cancelled. Bummer, when do I get a refund?

• 30 DAYS?!

• Usually?!

I get that the event organizer (Cobb’s Comedy Club) needs to send the funds back to the ticketing platform, which will then refund me and that takes some time. That said, I don’t see how 30 days is an acceptable timeframe for a refund these days, especially since my OCD will compel me to monitor this regularly 🫩

Stablecoin payments will help expedite refund processes for negative experiences like these.

As much fun as NFTs and memecoins have been (I still believe in a bright future for both), it seems that stablecoins have been anointed as the chosen onramp for mass market crypto adoption, and I’m here for it.

Less speculation, less complexity, more practicality.

See you next week!