Can Stablecoins Be Used in Transactions for Goods?

Earlier this year, Paxos’ move to comprehensively regulate its blockchain infrastructure incited further growth in the stablecoin market.

Due to its emphasis on safety and security, this asset class was already a popular choice for crypto investors, but recent reports have suggested an increase from $53 billion in 2023 to $187 billion by 2028.

For investors considering what cryptocurrency to invest in, stablecoins could prove to be a strong option, especially considering their real-world use.

What Are Stablecoins?

Unlike other cryptocurrencies such as Bitcoin and Ethereum, stablecoins are an asset class pegged to the value of another commodity. In theory, they are supposed to be the digital equivalent of a fiat currency.

For instance, the US dollar is currently worth £0.83 in the UK. A stablecoin pegged to the US dollar will remain at that value, and it won’t dip below the peg if other cryptocurrencies fall.

It’s important to note the word “theory”, here, as there was an instance in 2022 where the stablecoin Terra dived below its $1 peg, causing a negative ripple effect throughout the rest of the cryptocurrency market.

But this remains a relatively unique case, and stablecoins are still seen as the best option for investors looking to avoid the volatility of the crypto market.

Can Stablecoins Be Used For Transactions?

With 75% of retailers looking to adopt cryptocurrency into their payment systems in the next couple of years, many investors are growing more interested in purchasing coins that can be used in real-world cases.

As of 2023, a number of tokens including BTC, ETH, and DOGE, have been adopted by businesses like Starbucks, Tesla, and Microsoft. Meanwhile, the crypto-friendly igaming industry is including stablecoins such as USDT and TRON as rapidly growing alternatives – click here for more information.

But what about going to your local coffee shop and using a stablecoin for a goods transaction? At the moment, the idea of using stablecoins in an average store is still something for the future. As mentioned previously, 75% of retailers are looking to incorporate crypto, but that could take longer than two years, especially with the volatility that is present in the cryptocurrency market right now. That doesn’t mean no stores accept stablecoins, however. Currently, the most popular include:

●        Elephant Chateau

●        Travala

●        Coinsbee

●        CoinVPN

●        Bitrefill

●        Mile High Gear

●        Serpent Publishing

When Will More Businesses Accept Stablecoin?

Considering the very first stablecoin – BitUSD – went live in 2014, the move from businesses to adopt this form of payment is not a slow one. This is a new form of currency, still not fully regulated or backed by governments, so it’s to be expected that some businesses will be hesitant to integrate it.

That being said, the number of businesses accepting stablecoins in goods transactions might be about to rise. As mentioned before, Paxos and PayPal changed the cryptocurrency market by issuing a coin that is fully regulated, which means that the holders of those coins will have far more protection.

Even if Paxos were to file for bankruptcy, customers' assets would be safe and secure, with funds being returned to every token holder. This has now set the bar for every stablecoin, which will only increase investor interest and the interest of businesses looking to offer consumers more payment options. 

The Future Of Stablecoins

While the 2022 Terra debacle shook the crypto world, stablecoins are still supposed to be the most secure coin for investors, which makes them even more attractive to businesses.

With the worth of the token secured, businesses will know what they are being paid and what it is worth – something that can easily change for businesses accepting BTC or ETH.

In the near future, it’s likely that more businesses will start accepting stablecoins such as USDT, amongst others, as a viable alternative to their consumers.