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Stablecoins are part of the future of money – and they’re already here

TL;DR: Americans’ #1 objection to using cash in the current financial system is that there are too many fees to access and move their money. Stablecoins offer consumers all the benefits of cash without the drawbacks, including being cheaper and faster to move. They’re a big part of the future of money – and they’re already helping to update the system. As their importance grows, so does the urgency for clear stablecoin regulation.

By Coinbase

Policy

, December 4, 2023

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Americans are fee’d up. Their #1 objection to using cash in the current financial system is that there are too many fees to access and move their money.¹ Younger adults in particular (ages 18-34) feel the everyday pain points of dealing with the current financial system — including fees. 

At Coinbase, we’re working hard to help update the financial system and bring 1 billion people into cryptocurrency because we believe crypto and blockchain technology can increase economic freedom and opportunity. Stablecoins offer consumers all the benefits of cash without the drawbacks – they’re faster, more affordable, and more accessible than fiat money, but just as stable and secure. They bridge traditional, physical cash payments and the digital space by helping currencies like the US dollar exist in digital form and move freely and efficiently on blockchains. Stablecoins are a big part of the future of money, and they’re already here.

Cash is outdated

Physical cash no longer meets the needs and expectations of today’s digitally savvy consumers. Fiat transfers can take days. Today’s consumers want payments that happen as fast as the internet and with the reach of the internet, across borders, without compromising security. 

We want to keep the good…

There are reasons why physical cash has been so popular for so long. It’s private; stays stable in times of economic volatility; and supports instant payments person-to-person. These are strong upsides that we want to carry forward in payment systems of the future. 

...And lose the bad

In particular, traditional payment processes are loaded up with fees and interest charges for people having the “privilege” of moving their own money. Fiat transfers can come with fees as high as 3%-6% for cross-border transactions. According to the Consumer Financial Protection Bureau (CFPB), credit card companies charged consumers more than $130 billion in fees and interest in 2022.

Research conducted for Coinbase found that not only are fees Americans’ top objection to using cash in the current financial system, but that Americans aged 18-34 are more likely than older adults to feel the everyday pain points of dealing with the current financial system and its big institutions — particularly on fees and international transactions.²

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 Stablecoins are a big part of the future of payments

Stablecoins offer consumers all the benefits of cash without the drawbacks:

  • They’re more affordable: Sending a stablecoin via the blockchain can cost a fraction of the cost of traditional payment rails — making them more appealing for consumers and merchants alike.

  • They’re just as secure: Dollar-backed stablecoins are pegged 1:1 to the US dollar, which means that their value remains steady and predictable.

  • They’re more efficient: The blockchain provides near-instant settlements for peer-to-peer stablecoin transactions. Recipients get their money almost immediately regardless of their physical location.

  • And, they’re more accessible: More than half of Millennials and Gen Z adults (over 50 million people)³ are taking part in the traditional financial system only sometimes or not at all. Access to stablecoins is governed by neutral software code, not by gatekeeper financial institutions with eligibility requirements.

Beyond the US

In countries with unstable governments and currencies, stablecoins are a neutral, decentralized way for citizens to safeguard their savings and transact across borders. Emerging markets already dominate overall crypto adoption (out of the top 20 countries by crypto adoption, only two are “high income”). Nigeria and Brazil, the sixth and seventh biggest countries by population, for example, are proving to be pivotal in encouraging the adoption of stablecoins and cryptocurrencies around the world.

  • In Nigeria, the primary driver for stablecoin ownership is to secure money in USD and to be able to transact internationally more efficiently. Nearly every Nigerian internet-using adult (99%) is aware of cryptocurrencies generally, more than half feel knowledgeable about stablecoins, and nearly three in 10 (28%) have owned them.⁴

  • In Brazil, 51% of crypto owners have owned or currently own stablecoins. Among current owners, 58% see the best use case to be saving money without risk of volatility. Half want to earn interest on their deposits.⁵

  • And in Argentina, another early adopter, protection against inflation and changing values is the primary driver of stablecoin ownership, with 12% of the internet-using population having owned stablecoins and 64% aware of them.⁶

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Join Coinbase in advocating for clear rules

While Coinbase is working with many international markets that are moving forward with strategies to become “crypto hubs," we chose to become a public company in the US because we believe the US would best be served by embracing this fundamental innovation — including the promise of stablecoins. Clear, sensible stablecoin rules are needed now in order to make sure the US doesn’t fall behind. You can make a difference. Here’s how:

  • Raise your voice: Stablecoins are an important piece of the crypto policy puzzle, so call your member of Congress to support legislation that will enable stablecoins while protecting consumers, and become a part of communities advocating for crypto regulations. Join the more than 100,000 advocates in the Stand with Crypto alliance to make your voice heard on the topics that matter most. 

  • Stay informed: We’ve developed educational resources to help you dive deep and learn more about the world of stablecoins. You can learn more on Coinbase Learn, in our Stablecoins Whitepaper, or in this stablecoins blog post.

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¹ Stablecoin research, Q4 2023

² Stablecoin research, Q4 2023

³ Coinbase and Morning Consult, Multicultural and Underserved Audiences Research, 2023

⁴ Stablecoin Opportunity, Nigeria, Argentina, Philippines, Brazil, Q1 2023 

⁵ Stablecoin Opportunity, Nigeria, Argentina, Philippines, Brazil, Q1 2023

⁶ Stablecoin Opportunity, Nigeria, Argentina, Philippines, Brazil, Q1 2023

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