Mastercard says stablecoins still face hurdles to go mainstream

Mastercard’s Chief Product Officer Jorn Lambert says stablecoins are still far from becoming a mainstream payment option. This comes despite all the buzz surrounding the technology.

During a call with analysts on Monday, Lambert said stablecoins boast incredible technical potential — fast transactions, 24/7 uptime, low fees, programmability, and immutability. But those features alone don’t make them ready for everyday payments. 

He noted that people also need a frictionless user experience, broad accessibility, and consumer distribution.

Mastercard eyes role as key infrastructure provider for stablecoin adoption

Mastercard sees itself as the connective tissue between the world of crypto and traditional finance. Lambert emphasized that Mastercard can offer the kind of infrastructure — global acceptance, security protocols, and regulatory compliance — needed to help stablecoins scale and become useful at checkout.

This vision isn’t new. Mastercard and rival Visa have been exploring stablecoin initiatives since at least 2021. Mastercard recently partnered with Paxos to support the minting and redemption of the USDG stablecoin. The company also backs stablecoins like FIUSD from Fiserv, PYUSD from PayPal, and USDC from Circle, signaling its long-term ambition to power the backend of stablecoin transactions.

Consumer friction and low utility keep stablecoins from mainstream use

Lambert notes that about 90% of stablecoin usage today is still tied to crypto trading, not consumer purchases. While companies like Coinbase and Shopify have made moves to enable stablecoin payments for everyday goods and services, significant barriers remain, particularly user adoption and checkout friction.

Lambert highlighted that existing stablecoins do not presently offer a compelling use case for peer-to-merchant payments. He likened them to prepaid cards, with the ability for users to spend their wallet balance with some merchants, although the feature set is limited.

Despite the common narrative being that stablecoins can be used to circumvent card networks and the transaction fees that are paid to process transactions, Mastercard and the rest are attempting to flip the script, presenting themselves as necessary allies who can help increase stablecoin utility by integrating them into established payment rails.

Mastercard’s Chief Commercial Payments Officer Raj Seshadri added that stablecoins have hidden complexities. “You still need to convert to and from fiat. That adds costs — not just the price of the stablecoin itself, but also the FX, regulation, settlement, and ramping infrastructure.”

Still others hold counter opinions. Federal Reserve Governor Christopher Waller recently said that stablecoins will bolster competition in the payments system, and that was a positive direction.

Speaking at an event at the Dallas Fed, Waller said that the rise of stablecoins will make many payments cheaper and faster. He noted, “And that’s the goal for me, as a free-market capitalist economist, is that I want competition in payments to drive down the cost for households, consumers, and businesses. That’s it.”

With stablecoin regulation gaining traction in the US, banks and institutions increasingly weigh their role in this evolving space. Regulatory clarity is prompting some to explore offering stablecoins or deposit tokens to retain deposits that might otherwise flow into digital wallets.

According to Lambert, every financial institution evaluates whether it needs to issue stablecoins and what the right product-market fit might be. For many, the focus is on avoiding a loss of control over customer deposits.

Beyond the private sector, Lambert noted that governments and central banks are also taking a closer look at digital currencies, aiming to support innovation while preventing dollarization in their domestic economies. “We expect to see a wide range of approaches emerge globally,” he said.

The crypto industry is moving closer to mainstream adoption as Congress advances a slate of pro-crypto bills this week. Dubbed “crypto week” by the Republican-led House, the legislative push includes a landmark bill to create a regulatory framework for stablecoins, potentially heading to President Donald Trump’s desk for approval.

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