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Key Developments in Stablecoin Adoption
Following the passage of the U.S. Stablecoin bill in September 2023, major retailers and financial institutions, including Walmart (NYSE: WMT), Amazon (NASDAQ: AMZN), and Fiserv (NYSE: FI), are exploring stablecoin pilots and infrastructure investments. This legislative move introduces clear regulations, such as full reserve backing and regular audits, which are expected to enhance adoption of stablecoins in payments.
U.S. merchants incurred approximately $187 billion in card fees in 2022, with a substantial portion paid to Visa (NYSE: V) and Mastercard (NYSE: MA). Retailers are drawn to stablecoins due to lower transaction costs, faster settlements, and the potential for enhanced customer relationships. Shopify now allows merchants to accept USDC, while Fiserv develops tailored infrastructure for smaller banks and fintechs.
Despite these benefits for retailers, consumer adoption remains uncertain. Presently, traditional card payments are preferred due to their familiarity and associated rewards. While innovations in loyalty programs tied to stablecoins could spur interest, significant consumer incentives are required to disrupt the established system.
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