Stablecoins currently struggle to compete with traditional payment platforms like Visa and Mastercard due to a lack of robust consumer protections, according to Guillaume Poncin, CTO of Alchemy. Retail consumers expect features such as chargebacks, fraud protection, and dispute resolution, which are standard with traditional financial services. Poncin advocates for embedding consumer protection features directly into smart contracts and suggests that stablecoin issuers could establish insurance pools for fraud payouts. He envisions a future where major payment processors incorporate stablecoins and banks issue their own, enhancing traditional payment systems with blockchain efficiency. While stablecoins excel at cross-border transactions and provide lower costs, they need to address consumer concerns to attract a broader audience, particularly for domestic retail transactions where hybrid models combining instant settlement and consumer protections will likely emerge. The ongoing debate about stablecoins continues as traditional banks lobby against potential yield-sharing with customers, raising concerns about their impact on lending and mortgages.

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