Stablecoins are becoming increasingly integrated into everyday financial activities. Their utility has expanded from trading and investment to practical, real-world transactions. Recent developments highlight this trend, with major stablecoins like DAI and Tether (USDT) gaining significant traction among merchants and within the European Union's retail sector. This shift indicates a growing acceptance of digital currencies for daily use, moving beyond speculative purposes.
DAI Now Accepted at EU Retail Stores
The financial platform 2Gether recently announced the addition of support for the stablecoin DAI. This marks the first time the platform has integrated a stablecoin into its payment system.
With this new feature, 2Gether users can now spend DAI just as they would spend euros, and without any transaction fees. Any merchant within the European Union that accepts Visa credit cards will now effectively accept payments made in DAI. Furthermore, the platform enables DAI holders to buy and sell 13 different cryptocurrencies without incurring fees and allows them to send DAI to external wallet addresses.
The company explained that its decision to support DAI was driven by a goal to provide practical utility for cryptocurrency operations. DAI was selected because it uniquely combines the crucial characteristics of being both decentralized and price-stable. This makes it an ideal medium of exchange for everyday transactions.
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E-commerce Platforms Adopt Tether's USDT
Paolo Ardoino, the Chief Technology Officer of Tether (the company behind USDT) and cryptocurrency exchange Bitfinex, has stated that Tether is actively expanding its presence in the e-commerce sector. He believes that USDT can significantly enhance transaction speed and efficiency for online merchants, offering a faster alternative to traditional credit card payments and other legacy financial systems.
"Merchants need stablecoins to protect their businesses from the price volatility associated with other crypto assets like Bitcoin," Ardoino noted. "Tether is being widely adopted by merchants and e-commerce infrastructure providers. As this is a new trend, we are still in the process of gathering data and evaluating its full impact."
Recent reports suggest that due to its relative price stability, USDT is emerging as a popular payment method. Some analysts even suggest that its adoption rate for payments is beginning to rival that of major cryptocurrencies like Bitcoin and Ethereum. This growing adoption is a testament to the market's demand for a digital asset that offers the benefits of blockchain technology without the associated price volatility.
The Regulatory Landscape for Stablecoins
Despite this positive momentum, the future of stablecoins as a widespread payment tool faces significant challenges, primarily from regulatory bodies worldwide. The proposed Libra project (now Diem) from Facebook brought intense regulatory scrutiny to the entire stablecoin category.
In the United States, there have been legislative efforts to classify certain stablecoins as securities. For instance, a draft bill was previously introduced that sought to place all managed stablecoins under the jurisdiction of the Securities and Exchange Commission (SEC). If such legislation were to pass, it would subject stablecoin issuers to a completely new and rigorous regulatory framework.
The German government has also taken a firm stance. While it has embraced blockchain technology for applications like digital identity and enterprise finance, it has simultaneously expressed strong opposition to private stablecoins. The government has explicitly stated its intent to ensure that stablecoins do not position themselves as alternatives to state-backed currencies, thereby protecting the existing monetary system from potential disruption. This reflects a broader concern among global regulators about the systemic risks posed by widely adopted private digital currencies.
Frequently Asked Questions
What is a stablecoin?
A stablecoin is a type of cryptocurrency designed to maintain a stable value by being pegged to a reserve asset, such as the U.S. dollar, euro, or a basket of assets. This minimizes the price volatility common in other cryptocurrencies like Bitcoin.
How can I use DAI for shopping in the EU?
To use DAI for purchases in the EU, you need a supported financial platform or card, like the one offered by 2Gether. If a store accepts Visa payments, you can likely use your DAI balance to pay for goods and services directly, just as you would with a traditional debit or credit card.
Why are merchants adopting USDT?
E-commerce merchants are adopting USDT because it offers faster and potentially cheaper settlement compared to traditional payment processors and credit cards. More importantly, it allows them to accept digital currency payments without exposing their revenue to the extreme volatility of other cryptocurrencies.
Are stablecoins considered legal tender?
No, stablecoins are not considered legal tender. Legal tender is currency issued by a government. Stablecoins are privately issued digital assets that are pegged to the value of government-issued currencies or other assets.
What are the main risks of using stablecoins?
The main risks include regulatory uncertainty, potential de-pegging from its underlying asset, and the solvency and transparency of the issuing company holding the reserve assets. Users should research an issuer's proof of reserves.
Could stablecoins replace traditional money?
While stablecoins offer many advantages for digital transactions, it is unlikely they will fully replace state-backed traditional money in the near future due to significant regulatory hurdles and the central role of sovereign currencies in the global financial system.