Stablecoin issuers including Coinbase, Paxos and Terra are planning to change directions as a result of consumer interest in using stablecoins as a mean of payment rather than simply for trading reports The Block.
For instance, Coinbase’s payment-focused arm, Coinbase Commerce is supposedly cheering on shoppers to make use of the USDC stablecoin. Similarly, Paxos has been promoting the PAX stablecoin for daily purchases and Korean-based Terra, has supposedly garnered the attention of 240K shoppers, using customer base as a way to stimulate individuals to purchase basic needs with its tokens.
According to the Head of Coinbase Commerce, Justin O’Brien, while the initial use case for stablecoins were merely for trading, using them as a means of payment does not come too much of a surprise, hence the reason why it can be deemed “one of the subsequent use cases.”
Such change in direction for said businesses comes at a recent time. Coinbase has now included USDC to its already selected list of cryptocurrencies including Bitcoin [BTC], Ethereum [ETH], Bitcoin Cash [BCH] and Litecoin [LTC]. As for Paxos, it has been securing partnerships with debit card providers, spend.com and crypto.com so that consumers can hold PAX for daily spending.
The news outlet referenced a previously shared statement by the CEO of Paxos, Charles Cascarilla, who shared that the use of stablecoins can help to eradicate merchants of settlement risk. That is:
“When you pay with PAX, they immediately get the dollars. It’s sitting in the merchant’s hands and he can go buy something with it immediately. It’s not some IOU he is going to get in a day or two.”
As for the CEO of Terra, Daniel Shin believes that it will take time for consumers to onboard the crypto train because blockchain technology is new and “everyone is scared of new technology.”
He also stressed the need to attract customers who are seriously considering the likes of crypto but currently remain on the sidelines by providing discounts.
Terra has promised a cut in transaction fees by 90 percent to merchants. Interestingly, upon establishing the stablecoin-based payment app on two Korean sites, over 380,000 transactions were completed, and this was within 40 days.
All three entities are firm in their opinion that adoption of stablecoins requires some incentive for consumers, otherwise onboarding them would not be an easy task.