USDC Stripe Endorsement Could Help Circle Edge Out Stablecoin Competition
Stripe powers payments for millions of eCommerce websites. Photo by Firmbee.com on Unsplash.
Key Takeaways
- Stripe is bringing back crypto payments six years after dropping the option.
- However, unlike last time, the platform will integrate USDC rather than Bitcoin.
- Stripe’s endorsement could give Circle a significant boost in the stablecoin market.
After a six-year hiatus, Stripe has brought back crypto payments. This time, however, the firm is integrating stablecoins rather than Bitcoin.
Having selected USDC for stablecoin payments, Stripe could be Circle’s most important client yet, helping boost adoption at a time when market leader Tether is facing multiple threats to its dominance.
Stripe USDC Support a Threat to Tether Dominance?
With a market capitalization of over $100 billion, USDT accounts for roughly 70% of the global stablecoin market, leaving USDC in a distant second place. But if just a few percent of Stripe’s annual transaction volume turns into stablecoins, it could close the gap.
In 2023, Stripe processed over $1 trillion in transactions. Given the firm’s eCommerce strength in, it is arguably the company best positioned to bring stablecoin payments to the mass market.
Stripe’s endorsement reflects Circle’s position as the institutional darling among stablecoin issuers. It is considered a safer option in a US regulatory environment that threatens to leave Tether out in the cold.
Proposed stablecoin regulation could favor US-based issuers like Circle while making it more difficult for Tether to sell its services from the British Virgin Islands. USDT has also been subject to criticism from lawmakers over shortcomings in its anti-money laundering efforts.
As the regulatory safe bet, USDC in in a good position to become the preferred stablecoin for US businesses. And with Stripe’s help, it will soon become easier than ever for them to accept it.
USDC vs, PYUSD
Stripe’s decision to embrace USDC could be compared to the alternative stablecoin strategy pursued by another American payments giant – PayPal.
Unlike Stripe, PayPal has opted to develop its own stablecoin to power payments on its platform. This has the advantage that PayPal earns a share of the revenue generated by user’s deposits. However the rollout of PYUSD has been slow so far.
While PayPal must first convince people to buy into its new coin, Stripe is hitting the ground running with a token that already circulates widely.
Stripe’s Ambitious Stablecoin Vision
Stripe’s new USDC functionality also goes beyond what PayPal has attempted with PYUSD. It aims to integrate the payment option across millions of websites that use the platform.
During a presentation on Thursday, April 25, CEO John Collison demonstrated a new crypto checkout experience that merchants will be able to pilot this Summer.
Counting the likes of Google, Amazon, and Walmart among its clients, Stripe could soon bring stablecoin payments to some of the biggest digital platforms in the world.
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