The crypto industry’s long had an obsession with mass adoption — and right now, there’s a huge opportunity to win round millions of consumers.
In major economies, interest rates are beginning to tumble. The European Central Bank has slashed theirs four times so far this year, with the Bank of England opting for three. And the Federal Reserve has just unveiled its first cut so far in 2025.
While this is great news for those borrowing money — as it reduces the cost of mortgages, car loans and credit cards — it puts savers at a disadvantage, as their cash will now grow at a lower rate.
Consumers in many countries have long been frustrated about the interest paid on their cash holdings. The rates offered are often well below the central bank’s base rate — especially in checking accounts — and in some cases, the most competitive deals are only available to those who are willing to lock away their savings for years on end, with penalties if they need to withdraw early.
For those preparing for a rainy day, there’s another problem: inflation. The prices of everyday items remain well above the 2% target in both the U.K. and U.S. That erodes spending power over time, and lower interest rates mean cash can end up stagnating rather than growing with each passing year.
That brings us to how the crypto industry can genuinely appeal to billions of people — even those who may have been skeptical about digital assets in the past. Stablecoins have the chance to attract consumers, with exchanges regularly offering more competitive interest rates than old-fashioned bank accounts.
Coinbase is already sensing an opportunity here. A few days ago, CEO Brian Armstrong noted that most Canadian checking accounts offer 0% interest, arguing this makes “zero sense.” He went on to announce that Coinbase customers who live there can now earn up to 4.5% yield on the USDC they hold on this platform. And while some banks only offer their best rates for a fixed amount of cash — say $1,000 or $5,000 — Armstrong says this exchange’s stablecoin rewards are uncapped.
While it’s long been argued that faster payments are one of the most compelling use cases for stablecoins, this is unlikely to be a major draw for shoppers already satisfied with contactless cards and Apple Pay. But if consumers suddenly find out they could earn $45 in interest for every $1,000 in their Coinbase account — as opposed to 0% in their bank — they would probably sit up and take notice.
Unfortunately though, challenges remain. We’re not going to see a billion people rush into stablecoins overnight. Although the likes of Coinbase would argue that they offer a slick user experience that anyone can understand — even those who may not be tech savvy — crypto remains daunting and overly complicated to a large chunk of the population. Much more work needs to be done on educating the public, and reducing friction.
Another threat on the horizon relates to the prospect of regulatory clampdowns. In recent weeks, the Bank of England has unveiled proposals that would limit the value of stablecoins a single person could own. The exact details are unclear at this point — and the cap could be anywhere between £10,000 and £20,000 ($13,500 to $27,000) for individuals. Coinbase executives have already lashed out at the measures, with Tom Duff-Gordon warning:
“Imposing caps on stablecoins is bad for U.K. savers, bad for the City and bad for sterling. No other major jurisdiction has deemed it necessary to impose caps.”
It’s highly likely other central banks may follow suit. Regulators in Europe have already sounded the alarm over the rise of dollar-denominated stablecoins, arguing they risk weakening the euro and threatening financial stability. Dwindling deposits in old-fashioned accounts may also mean banks lack the necessary capital for lending — potentially making it harder for first-time buyers to get a mortgage.
Of course, we need to talk about the elephant in the room too: consumers being drawn in by stablecoin yields that are simply too good to be true. Just a few short years ago, Celsius had wooed customers by offering 11% returns on Tether deposits — but the lending platform went on to abruptly halt withdrawals and crash into bankruptcy, leaving customers locked out of their life savings.
Stablecoins are on the brink of a breakthrough moment. But make no mistake, the path to mass adoption could end up being a bumpy one.
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