The world's largest retail and e-commerce corporations are either beginning to use stablecoins or actively considering issuing their own. Companies like Walmart and Amazon are exploring the creation of proprietary stablecoins, along with online travel agency Expedia and major airlines. E-commerce leader Shopify is already moving forward with a new initiative.
Shopify is introducing stablecoin payments for its merchants via Base, an Ethereum Layer-2 network developed by cryptocurrency exchange Coinbase. This functionality will be available to a small group of early-access merchants starting June 12, with a full rollout to all merchants using Shopify Payments expected later this year.
Once fully launched, merchants in 34 countries will be able to accept on-chain payments in USDC, a stablecoin issued by Circle, while receiving settlements in their local currency—all without incurring foreign transaction fees. Shopify has also announced plans to offer a 1% cashback incentive for customers who pay with USDC. Merchants can choose to receive USDC directly into an external wallet if they prefer.
The Drive Toward Stablecoins in E-commerce
Traditional retail and e-commerce platforms operate within vast networks of customers and employees, handling enormous volumes of data. For years, banks have viewed these companies as potential disruptors. If major retailers bypass traditional banking channels, it could mean losing billions in revenue from cash and credit card transaction fees.
Stablecoins are digital tokens pegged to real-world assets, commonly used to store value or facilitate cryptocurrency trades. They maintain a 1:1 exchange rate with government-issued currencies like the U.S. dollar and are backed by reserves of cash or cash-equivalent assets, such as U.S. Treasuries.
Retailers are closely monitoring U.S. congressional progress on the proposed Genius Act. A newly formed Merchant Payment Coalition is lobbying for the swift passage of this legislation, which would establish a regulatory framework for stablecoins. Market analysts predict that, with clear regulations, the stablecoin market could grow to several trillion dollars within a few years.
Besides high fees paid to banks and credit card networks, merchants also face delays of several days in payment settlement. Stablecoins promise near-instant settlement. Additionally, ongoing trade tensions have increased interest in stablecoins among businesses with overseas suppliers.
Merchants argue that adopting stablecoins would reduce transaction costs and increase competition among payment providers. Many have long sought alternatives to credit card networks dominated by Visa and Mastercard but have seen limited success. Aside from issuing their own stablecoins, another option for retailers is to collectively adopt an existing stablecoin. Interestingly, major banks are also exploring the formation of a stablecoin alliance.
How Stablecoin Payments Work in E-commerce
It’s important to note that in this model, consumers pay with stablecoins, but merchants receive settlements in their local fiat currency—not in USDC or other digital assets. The stablecoin acts as an on-chain transport mechanism within the payment process. Here’s a simplified breakdown:
- A customer selects USDC as their payment method at checkout on Shopify.
- The Shopify and Circle payment system receives USDC on a supported blockchain (e.g., Ethereum or Base).
- The system automatically converts USDC into the merchant’s local currency (e.g., USD, EUR, JPY) and deposits the funds. The merchant avoids foreign exchange fees and never directly handles cryptocurrency.
Why would Shopify offer a 1% cashback incentive? This strategy serves several purposes: attracting Web3-native users and crypto asset holders, increasing adoption of Shopify’s own payment system (Shopify Payments), and reducing reliance on high-fee traditional payment channels like Visa or PayPal.
This process relies on a hybrid infrastructure—on-chain payment initiation and off-chain traditional settlement. Circle plays a key role as the bridge between blockchain networks and conventional financial systems, ensuring compliance and managing liquidity.
Merchants receive settlements in their local currency through Shopify Payments, just as they would with any other payment method. They see standard settlement reports without exposure to cryptocurrency volatility. All conversions and forex calculations are handled automatically in the background.
Settlement still involves traditional banking infrastructure, including correspondent banks and fiat payment networks. This hybrid approach represents a fusion of Web3 innovation with established Web2 financial systems.
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The Expanding Use Cases for Stablecoins
Stablecoins are now used for far more than moving funds between cryptocurrency exchanges. Real-world applications are growing rapidly, with total stablecoin supply increasing by 54% year-over-year. Companies like PayPal and Grab are increasingly utilizing stablecoins for payments and cross-border remittances.
Over the past two years, the total value of global stablecoin payments exceeded $94 billion. Monthly payment volumes have grown from under $2 billion to over $6.3 billion during this period.
The open-source payment protocol developed collaboratively by Coinbase and Shopify is part of a growing trend: using crypto-native infrastructure to streamline global e-commerce, reduce costs, and improve efficiency. Smart contracts and payment protocols can be integrated directly into merchant order-fulfillment systems.
Major Chinese tech firms are also entering the space. Ant International, Ant Digital Technologies, and JD.com are among those applying for stablecoin licenses in Hong Kong. As crypto payments gradually enter mainstream retail, more e-commerce giants are preparing to make their move.
Frequently Asked Questions
What is a stablecoin?
A stablecoin is a type of digital currency whose value is pegged to a stable asset, like the U.S. dollar. It combines the instant processing and security of cryptocurrency transactions with the reduced volatility of traditional money.
Why are e-commerce companies interested in stablecoins?
E-commerce platforms see stablecoins as a way to reduce payment processing fees, accelerate settlement times, and offer more payment choices to their customers, especially in cross-border transactions.
Do merchants need to understand cryptocurrency to accept stablecoin payments?
Not necessarily. In implementations like Shopify’s, merchants receive settlements in their local fiat currency without needing to manage crypto wallets or handle digital assets directly.
Are stablecoin payments secure?
When implemented responsibly, stablecoin transactions occur on blockchain networks, which provide transparency and security. Additionally, reputable stablecoins like USDC are fully backed by reserve assets held in regulated financial institutions.
What is the role of regulation in stablecoin adoption?
Clear regulations, such as those proposed in the U.S. Genius Act, provide legal certainty for businesses and consumers. A well-defined regulatory framework is expected to accelerate institutional adoption of stablecoins.
How does the hybrid on-chain/off-chain model benefit traditional businesses?
This model allows businesses to leverage the speed and cost efficiency of blockchain for payment initiation while still integrating seamlessly with existing accounting, tax, and banking systems that operate in traditional currencies.