The Real Adoption Trends of Stablecoins in the E-commerce Sector: Challenges, Cases, and Future

The prospects of Crypto Assets as a mainstream payment method in e-commerce have long been highly anticipated. In theory, its advantages such as irreversible transactions, low fees, and instant cross-border payments seem to perfectly address the pain points of traditional payment systems. However, in reality, the adoption of Crypto Assets in the e-commerce sector has been slow. It wasn't until recent years, with the increasing maturity of the market and technological advancements, that this situation began to change. This article will delve into the adoption journey of Crypto Assets in the e-commerce field, from the gap between early expectations and reality, to the crucial role of network effects, and finally to the new possibilities brought by stablecoins, revealing the core logic and future direction behind it.

The Gap Between Early Expectations and Reality: Why Theoretical Advantages Have Not Translated into Market Acceptance?

Around 2014, with the first round of the Bitcoin price bubble at the end of 2013 (although relatively small by 2017 standards), Crypto Assets first entered the mainstream view. At that time, the industry was generally optimistic that e-commerce would become the "breakthrough point" for the popularization of Crypto Assets. In particular, small and medium-sized e-commerce merchants were expected to be the first to embrace this emerging payment method—after all, the "chargeback risk" in the traditional payment system had always been their nightmare. For example, customers might request credit card companies to reverse payments for reasons such as "goods not received" or "fraudulent transaction," while merchants often had to bear the full loss. The irreversible nature of Crypto Assets' "Push Transaction" should fundamentally solve this problem.

In addition, the pain points of cross-border payments have provided a stage for Crypto Assets. Traditional bank transfer fees can be as high as 3%-5%, with arrival times taking 3-7 days; whereas the cross-border transfer fees for Bitcoin and other Crypto Assets are fixed (only a few cents in the early days), and the arrival time is only about 10 minutes. For e-commerce merchants relying on global supply chains, this seems to be an ideal choice for "reducing costs and increasing efficiency."

However, the theoretical advantages have not translated into actual adoption. Although a few leading companies like Dell and Expedia have attempted to integrate Bitcoin payments, user adoption rates have been extremely low. For example, after Expedia announced it would accept Bitcoin in 2014, it discontinued the service just two years later due to "insufficient transaction volume." More critically, the technical limitations of Bitcoin itself became a fatal shortcoming: the Bitcoin scaling controversy escalated in 2017, with transaction fees soaring to $20 per transaction, making it "uneconomical" to purchase items under $100 — spending $20 in fees for a cup of coffee is clearly unreasonable. At this stage, the attempts of Crypto Assets in the e-commerce sector resembled more of a "pioneering experiment" rather than a large-scale application.

Insights from Network Effects: Understanding the Essence of Currency Substitution through the "Ramen Economics" of American Prisons

The early setbacks of Crypto Assets in the e-commerce sector essentially reflect the "underlying logic of currency substitution": for a new currency to replace the existing system, it must overcome the "network effect" of the old currency. This point can be profoundly inspired by the unexpected case of the prison economy in the United States.

In 2016, a study found that in American prisons, ramen has replaced tobacco as the primary "currency equivalent." For a long time, tobacco has been considered the "hard currency" in prisons due to its portability, divisibility, counterfeiting resistance (difficult to forge), scarcity, and wide acceptance, meeting all the core attributes of currency. The rise of ramen stems from the "food crisis" caused by long-term funding shortages in the American prison system: inmates generally face insufficient caloric intake, and ramen, as a high-energy, easy-to-store food, possesses a "practical value" (calories) that tobacco cannot replace. This case reveals a key rule: only when a new currency can meet the "core needs" that the old currency cannot cover, can the network effect potentially be broken.

Returning to the competition between Crypto Assets and traditional payment systems: While Bitcoin has addressed issues of chargebacks and cross-border fees, these advantages have not yet reached a "disruptive" level. Traditional payment systems (credit cards, PayPal, etc.) have formed a strong network effect through decades of accumulation—consumers have become accustomed to the safety mechanism of "consume first, dispute later," and merchants rely on mature reconciliation and refund processes. The "complexity threshold" of Crypto Assets (such as private key management and wallet operations), price volatility (daily fluctuations exceeding 10%), and the operational costs of technology (node maintenance, security protection) further weaken merchants' motivation. As mentioned in the blog: "Unless there is a fundamental demand like hunger, the monetary system will not change easily." Bitcoin failed to provide a reason for "must-use" in its early days, making it naturally difficult to shake the existing landscape.

Turning Point: The Cases of Japan and South Korea - The "Which Came First, the Chicken or the Egg" of Crypto Asset Popularization

In recent years, the adoption of Crypto Assets in the e-commerce sector has finally made significant progress, with cases from Japan and South Korea being the most representative. Despite the substantial drop in Crypto Asset prices at the beginning of 2018 raising market concerns, both countries have continued to promote the implementation of Crypto Asset payments in mainstream retail scenarios. For example, Japan's Rakuten announced support for Bitcoin payments in 2018, covering its e-commerce platform, travel services, and even mobile operator businesses; South Korea's largest convenience store chain CU (GS25) has also integrated Bitcoin and Ethereum payments, allowing consumers to purchase food and daily necessities with Crypto Assets.

The common point of these cases is that the popularity of Crypto Assets is not driven by merchants "actively promoting" it, but rather the result of "a user base leading the way". Japan and South Korea are among the countries with the highest rates of Crypto Asset ownership in the world—according to 2018 data, there are about 3 million Crypto Asset holders in Japan (accounting for 2.4% of the total population), and the number of Crypto Asset trading accounts in South Korea exceeds 5 million (accounting for nearly 10% of the total population). When a large number of users already hold Crypto Assets (as investments or asset allocation), merchants connecting to payment channels becomes a "smooth journey"—rather than letting users convert Crypto Assets into fiat currency for consumption, it is better to directly accept Crypto Assets to improve conversion rates. This confirms the logic of "users come first, then merchants": only when the "holding group" of Crypto Assets reaches a certain scale do merchants have the motivation to bear the connection costs; and the motivation for users to hold Crypto Assets initially often stems from investment needs rather than payment needs.

Stablecoin: The Key to Breaking the "Volatility Spell", or a New Centralized Trap?

Despite cases in Japan and South Korea showing breakthroughs for Crypto Assets in certain markets, price volatility remains the biggest obstacle to their becoming "mainstream payment tools". Imagine this: if you use 1 coin to purchase a computer worth $5000, and 24 hours later the coin price drops by 10%, you effectively paid an additional $500; conversely, if the price rises, the merchant faces a loss. This uncertainty makes it difficult for both consumers and merchants to regard Crypto Assets as a "measure of value".

The core solution to this problem is widely regarded as the "stablecoin" — a type of Crypto Assets that is pegged to fiat currencies (such as the US dollar or Japanese yen). Theoretically, stablecoins can balance the technical advantages of Crypto Assets (speed, low cost, cross-border) with the price stability of fiat currencies. However, in reality, the development of stablecoins still faces two major challenges:

1. The contradiction between centralization and decentralization

Currently, mainstream stablecoins (such as USDT and USDC) adopt a "fiat collateral" model: for every stablecoin issued, the issuer must deposit 1 US dollar in a bank account as reserves. Although this model can ensure price stability, it reintroduces centralization risks—users must trust that the issuer maintains "sufficient reserves" and does not "misuse funds." Historically, USDT has caused market panic due to issues with reserve transparency, leading to a brief deviation of its price from the 1 dollar peg.

2. Technical Bottlenecks of Decentralized Stablecoins

Another approach is "algorithmic stablecoins" (like DAI), which automatically adjust supply and demand through smart contracts to maintain price stability without the need for centralized reserves. However, these stablecoins rely on "over-collateralization" (for example, using $200 worth of Crypto Assets to collateralize $100 stablecoin), and may face a "death spiral" under extreme market volatility (price declines trigger liquidations, further exacerbating sell-offs). As of now, no decentralized stablecoin has achieved the scale and stability of fiat-backed stablecoins.

The blog presents an innovative idea: a decentralized stablecoin backed by a network of retailers. Similar to the banknotes issued by 19th-century America's "Wildcat Banks," which were jointly guaranteed by regional merchant alliances and relied on a network of actual goods and services to maintain value. This model could balance decentralization and practicality, but it requires the establishment of broad merchant consensus and user trust, which is difficult to achieve in the short term.

Future Outlook: Organic Growth and Diverse Coexistence

The popularity of Crypto Assets in the e-commerce sector will not be a "one-off" revolution, but rather a process of "organic growth." As the user base of Crypto Assets expands (according to Chainalysis's 2023 report, there are over 420 million Crypto Assets holders worldwide), the motivation for merchants to get involved will naturally increase; at the same time, the maturity of stablecoin technology (whether centralized or decentralized solutions) will gradually address the volatility issue.

In the end, Crypto Assets and traditional payment systems may form a pattern of "diverse coexistence": stablecoins are used for everyday small payments, mainstream Crypto Assets like Bitcoin serve as tools for cross-border large transactions, while traditional payment methods continue to cater to risk-averse users. Just as in American prisons where "ramen coexists with tobacco"—the former as the primary medium of exchange and the latter as a "store of value"—the future payment ecosystem will also differentiate based on varying scene demands.

Technology never waits for the hesitant. The history of the internet tells us that when infrastructure resonates with user habits, the speed of change will far exceed expectations. The true explosion of Crypto Assets in the e-commerce field may just be one "killer application" away - and the maturity of stablecoin could be that crucial turning point.