Stablecoins have been around for a little while now, but they’re back in the spotlight thanks to some new legislation—the GENIUS Act. With all the buzz, it’s worth unpacking what stablecoins are, why they’re gaining traction globally, and whether they really matter for the average U.S. consumer.
Let’s start from the top.
What Is a Stablecoin?
A stablecoin is a type of cryptocurrency designed to maintain a stable value—usually by being pegged 1:1 to a real-world asset like the U.S. dollar. The idea is simple: if you have 100 stablecoins in your wallet, the issuer of that coin should have $100 sitting somewhere to back it up.
These coins run on public blockchains and can move freely over the internet, which makes them widely accessible and fast. That’s part of the appeal, especially in countries where accessing U.S. dollars through traditional banking is difficult or impossible. With stablecoins, users can essentially hold dollars without ever opening a U.S. bank account.
What’s Driving the Buzz? Enter: The GENIUS Act
The GENIUS Act is a new piece of legislation that lays the groundwork for regulating stablecoins. Among its provisions, it requires that stablecoins be fully backed by high-quality, liquid assets and that issuers comply with anti–money laundering laws.
The bill is long, dense, and still being digested by policy watchers and financial institutions alike. But it’s a clear signal: stablecoins are no longer fringe tech. They’re entering the policy and regulatory mainstream.
Where Do You Get Stablecoins?
To acquire stablecoins, you go through a sponsor—think PayPal or Coinbase. You transfer your dollars to them, and in return, you receive stablecoins held in a digital wallet. PayPal launched its own stablecoin in 2023. JP Morgan has its own digital payment system as well (formerly called JPM Coin), and there’s been a marked improvement in the technology since launch. What used to take 12 seconds can now move in one second. What used to cost a dollar, now just a penny.
That kind of speed and cost efficiency makes stablecoins a viable tool for many, but especially outside the U.S.
Why Stablecoins Matter (Just Maybe Not to You…Yet)
For most U.S. consumers, stablecoins aren’t that compelling. Our dollars are already stable. Our credit and debit cards are universally accepted. Our payment systems work fine. But step outside our borders, and the picture changes.
If you live in a high-inflation economy, as hundreds of millions of people do, stablecoins let you bypass your weakening local currency and hold something pegged to the dollar. If you're a business trying to pay suppliers across borders, or an individual trying to send money home, stablecoins cut out multiple intermediaries and the fees that come with them.
Take this example: A company in Mexico wants to pay a supplier in Thailand. Today, the money goes from pesos to dollars to baht—most likely passing through multiple banks and incurring multiple fees. With stablecoins, it can be a direct exchange: pesos to stablecoin, stablecoin to baht. Faster. Cheaper. Fewer players in the middle.
Why Big Retailers Are Paying Attention
Retailers like Amazon and Walmart have floated the idea of launching their own stablecoins. Why? They want to avoid paying credit card transaction fees. Right now, every time you swipe your Visa or Mastercard, someone (usually the retailer) is paying a fee to the bank and card network.
Stablecoins could, in theory, cut Visa and Mastercard out of the equation altogether. If Amazon issued a stablecoin, you could convert $100 into your Amazon wallet, make your purchases, and bypass traditional card networks. That’s money saved for them.
But here's the catch: you’d need to open and fund a new digital wallet for each retailer. That’s friction. That’s a hassle. And most consumers won’t do it unless there’s a compelling reason or incentive.
Why Stablecoins Aren’t Catching Fire for U.S. Consumers (Yet)
For the average U.S. shopper, stablecoins solve problems (e.g., providing a stable currency) they don’t actually have. Our credit and debit cards are fast, secure, widely accepted—and they offer rewards. Many cards give 2–3% cashback. Stablecoins most likely need to improve on this level of convenience and reward.
Plus, credit cards let you dispute a transaction or get a refund. With stablecoins, there’s no chargeback mechanism. Once the transaction hits the blockchain, it’s final. So, unless Amazon, Walmart or other retailers build their own refund systems (and many might), that’s a deal-breaker for a lot of people.
There’s also the interest factor. If you park $1,000 in a Walmart stablecoin wallet and only spend $200, what happens to the other $800? It’s not earning interest. Walmart would need to build a system to sweep that into a high-yield savings-like account, or it’s dead money sitting there.
Where Stablecoins Could Thrive
While the U.S. market is more of a “wait and see,” stablecoins make a lot more sense in other markets:
- Currency volatility: In unstable economies, people don’t want to hold the local currency.
- Banking infrastructure gaps: Stablecoins offer a way to store and transact money digitally without needing a traditional bank account.
- Cross-border transactions: Individuals and businesses can avoid conversion fees and delays.
So yes—stablecoins are real, and their impact is growing. But their success, at least in the U.S., will depend on whether companies can offer enough incentives, infrastructure, and ease to convince consumers to make the switch.
Final Thoughts
Right now, the true appeal of stablecoins lies outside our borders and within enterprise-level transactions. But as technology improves, regulation gets clearer, and adoption grows, it’s worth keeping an eye on. Especially if your business, your investments, or your curiosity are global.
This commentary is for informational and educational purposes only. Opinions are subject to change.
Carnegie Investment Counsel (“Carnegie”) is a registered investment adviser with the Securities and Exchange Commission. Registration as an investment adviser does not imply a certain level of skill or training. For a more detailed discussion about Carnegie’s investment advisory services and fees, please view our Form ADV and Form CRS by visiting: https://adviserinfo.sec.gov/firm/summary/150488.
