Original author: Ben Weiss, Leo Schwartz
Original translation: Luffy, Foresight News
Dara Khosrowshahi, CEO of Uber
In June, Uber CEO Dara Khosrowshahi announced that the ride-hailing giant was considering stablecoins as a way to transfer funds globally. A year ago, such a statement from a tech giant executive would have seemed outrageous. But now, everyone from Apple to Amazon, not to mention major banks and brokerages, are rushing to embrace stablecoins—cryptocurrencies pegged to an underlying asset such as the U.S. dollar. What exactly has changed?
Most notably, the regulatory environment has shifted dramatically in Washington, D.C. The Senate has passed a bill, now before the House, that would clear the way for stablecoins to be integrated into the financial system.
Cryptocurrency supporters also say that stablecoins have an increasingly broad business prospect. Unlike more volatile cryptocurrencies such as Bitcoin and Ethereum, stablecoins are expected to become a more efficient payment method, which can send digital dollars at near-instant speeds and lower costs. This may fundamentally change the way companies handle global fund management, pay salaries to employees and contractors around the world, and other matters.
However, with the technology still in its early stages and the regulatory landscape unclear, analysts interviewed by Fortune are skeptical about whether stablecoins will be widely adopted by Silicon Valley tech giants in the near future.
Operating costs
For a company like Amazon, moving money around the world is costly. According to its 2024 annual report, international net sales accounted for 22% of consolidated revenue last year, totaling nearly $143 billion. Those sales are denominated in local currencies, which means the company must account for foreign exchange risk and currency fluctuations, which can cost it billions of dollars.
Nick van Eck, CEO and co-founder of stablecoin startup Agora, pointed out that global fund management is one of the advantages of stablecoins, with the ability to convert local currencies into stablecoins and repatriate them to the United States.
Agora allows companies to tokenize their own dollar stablecoins. Nick van Eck told Fortune that while Agora’s current clients are mostly cryptocurrency companies, his ideal client is a multinational corporation like PepsiCo, which has dozens of bank accounts and corporate entities around the world, as well as thousands of suppliers. “Stablecoins can greatly improve their capital efficiency,” he said. “Now you can transfer $100 million from one country to another in one second, instead of waiting for days.”
Agora isn’t the only startup looking to cash in on Silicon Valley’s stablecoin craze. Over the past year, a number of stablecoin startups, including Mesh, Bastion and BVNK, have raised tens of millions of dollars from venture capital firms. Last October, payments company Stripe completed a landmark acquisition of stablecoin startup Bridge for $1.1 billion.
Stripes customers include half of the Fortune 100 companies. The company provides a variety of payment products, including helping businesses automatically charge customers, providing pre-built checkout systems, helping customers make global remittances, etc. Co-founders Patrick Collison and John Collison praised stablecoins in their recent annual letter to investors, saying that such assets will help large companies expand globally faster and bring other benefits.
“Why should I pay with stablecoins?”
Colin Sebastian, an analyst at Baird who covers Amazon, told Fortune that companies are always looking for financial tools or payment methods that can help manage expenses or reduce friction. Traditional credit card payments are quite expensive, he said, and of course, cross-border transactions are even more expensive.
However, while Amazon and other multinational corporations may have a financial incentive to try stablecoins, convincing consumers to adopt the technology for payments will be trickier. “What will really drive a change in consumer behavior?” Sebastian asked. “Credit and debit cards are already very popular.”
Thomas Forte, an analyst at Maxim Group who follows consumer internet companies such as Amazon and Apple, agrees with Sebastian. He believes that the most logical use of stablecoins for Amazon is to accept customer payments through stablecoins, thereby reducing transaction fees. What I struggle with is: As an American consumer, why should I pay with stablecoins? Forte asked.
Agora co-founder Van Eck believes that, at least until stablecoins are more widely adopted in the U.S., the countries most likely to adopt the technology will be those with more volatile currencies, as consumers in these countries are more motivated to try more stable payment methods. He recalled a recent example of funding from angel investors outside the U.S., where one fund took 10 business days to arrive and another took 22 business days. This situation is very common, not only for individuals, but also for businesses operating across borders, he told Fortune.
In Argentina, for example, inflation has been going on for more than 15 years and the country’s currency has plummeted against the dollar. So it’s no surprise that stablecoin trading in Argentina accounted for nearly 62% of the country’s cryptocurrency trading volume between June 2023 and July 2024. The global average is about 45%, according to a 2024 report from Chainalysis.
Nic Carter, founding partner of Castle Island Ventures, a crypto venture capital firm that focuses on stablecoin investments, said: “I’m more focused on businesses that really solve problems for businesses, like helping a business in Nigeria pay someone in the Philippines.”
Despite this, large U.S. technology companies remain enthusiastic about the technology and have taken steps to enter this emerging field. PayPal has launched its own stablecoin. Online brokerage Robinhood and payment giant Mastercard have both joined an alliance whose members can mint or create stablecoins, USDG. Companies such as Amazon, Apple and Meta have also begun exploring the use of stablecoins for payments.
Meta has previously declined to comment on its stablecoin plans. Spokespeople for Apple and Amazon have not yet responded to requests for comment.
Baird analyst Sebastian said that with Congress about to complete regulation of stablecoins, there is little harm in large technology companies experimenting with this new technology. One common characteristic of many large technology companies is that they are very willing to try new things.
