How can banks drive stablecoin adoption among consumers?

Visa found 46% of Asia-Pacific consumers expect to use stablecoins within five years.

Banks may find greater success launching stablecoins through consumer payment apps, but adoption will depend on overcoming misconceptions about the digital assets and addressing fraud concerns.

The Hongkong and Shanghai Banking Corporation Limited (HSBC) launched its RedCoin stablecoin in its PayMe app on Oct. 23, letting the platform's 3.3 million users pay more than 100,000 merchants and make instant transfers between users.

“Integrating RedCoin directly into PayMe helps overcome customer acquisition challenges,” Phylis Liu, a credit analyst at S&P Global Ratings Hong Kong Ltd., said in a commentary on Oct. 26.

S&P said integrating stablecoins into existing banking apps gives them an immediate retail user base, addressing one of the biggest barriers to adoption.

A Visa survey found 46% of consumers across the Asia-Pacific region expect to use stablecoins within the next five years.
However, misconceptions remain widespread. Among 14,250 consumers surveyed in June and July, 41% thought stablecoins always increase in value, whilst 49% thought they could only be used to buy and sell cryptocurrencies.

Awareness was highest in Hong Kong at 84%, followed by India at 80% and Thailand at 77%, according to Visa.

Visa said wider adoption depends on offering stablecoins through familiar and regulated payment channels rather than limiting them to cryptocurrency platforms.

Questions to ponder

• Can stablecoins gain mainstream adoption through existing banking apps?
• What is the key to broader stablecoin use?
• How can banks build trust in stablecoins faster than cryptocurrency platforms?