Key takeaways

• Corporations are warming to stablecoins, with 4 in 5 “crypto-aware” small and mid-sized businesses considering the digital currency to address financial pain points
• 26% of Americans have explored cryptocurrencies as a payment option
• GENIUS Act legislation could help create a safety net for the $238 billion stablecoins market

Stablecoins — digital currency backed by a unit of monetary value, likely the U.S. dollar — may be coming to mainstream financial markets soon. As its name suggests, this iteration of digital currency is designed to hold its value, without significant pricing volatility. The stability factor, coupled with a proposed digital asset bill making its way through Congress, may have companies gaining confidence in stablecoins — and help bolster consumer trust in the currency as an investment or payment option. Empower findings show about 1 in 4 Americans (26%) have already explored using cryptocurrency as a cash alternative, with Gen Zers the most likely to use it (34%).

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Warming to a market that’s heating up

A roughly $238 billion market, stablecoins are gaining momentum in the global financial system — and the integration of more stable traditional assets with blockchain technology ultimately could transform how institutions and merchants do business.¹

Payment firms like PayPal and Visa already are embracing digital assets to facilitate easier transactions globally.² Last year, PayPal introduced its PYUSD stablecoin, which is pegged to the U.S. dollar, and plans to ramp up a vendor bill-pay option for its more than 20 million small-to-medium sized merchants by year end.³

Meanwhile, some large multinational retailers, including Amazon and Walmart, are considering using outside stablecoins or issuing their own — a move that potentially could help them save billions of dollars in credit card fees.⁴ Expedia Group, and some airlines are exploring similar steps.

Corporate leadership on the whole appears to be feeling friendlier toward digital assets and the tech behind them too. A recent survey reveals that roughly 60% of Fortune 500 executives say their companies are “working on blockchain initiatives,” and 81% of “crypto-aware” small- and medium-sized businesses are interested in using stablecoins to address their biggest financial pain points.⁵

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Oversight could be a game-changer

Lawmakers currently are moving to advance the GENIUS Act (Guiding and Establishing National Innovation for U.S. Stablecoins), which could reinforce the legitimacy of stablecoins and the underlying technology to create opportunities for both corporate and individual adopters.^6,7 If passed, the landmark legislation may give the stablecoins market a big boost by helping create a solid foundation for investors who are seeking a cash alternative and potential hedge against inflation.

While “dollarizing” digital currency doesn’t come altogether without risk, putting regulatory oversight in place may help mitigate some of that and provide some consumer protections by ensuring a framework that’s “substantially similar” to the federal one.⁸ For example, if an issuer’s stablecoins were to fail, while they would not offer federal deposit insurance coverage that traditional banking provides, the bill establishes investor safeguards and prioritizes their claims over those of creditors.^9,10

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Is the road ahead paved in stablecoins?

Stablecoins may answer the need for a less volatile trading instrument for those who are risk averse but interested in crypto. Last year, just 18% planned to invest in cryptocurrency according to Empower research, but the proposed legislation may give a green light to more widescale adoption.