| ▲ | notatoad 6 days ago |
| i'm still unclear what the crypto really adds to this play. stripe customers need to move their money around, and they need a trusted source to hold money. stripe could just do that. why add crypto into the mix? |
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| ▲ | mondrian 6 days ago | parent | next [-] |
| The GENIUS act enables tech companies to become reserve holders -- buy US Treasuries with customers' money. Stripe offers a "transactional ecosystem" to the customer in stablecoins, the customer gives USD to Stripe in exchange for stablecoins, Stripe buys short-term Treasuries and makes a shitload of money on interest. Part of the very high level play is the US Govt seeks to diversify away from depending on nation states for borrowing, and to promote tech companies to the status of reserve holders. This doesn't add much to the consumer however. I think in fact we are looking at a "fragmented currency" future where you hold like 36 different stablecoins in your wallet because certain platforms accept certain stablecoins. The GENIUS act doesn't offer strict guarantees for getting out of a stablecoin into USD, so I predict dark patterns and "incentives" to make it hard to get out of a stablecoin. |
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| ▲ | onesociety2022 6 days ago | parent | next [-] | | That only makes sense if Stripe issues their own stablecoins? If they let their customers hold USDC on the Tempo chain, then any revenue from holding short-term treasuries goes to Circle. Are you suggesting Stripe would force Circle to share some of their revenue with them or they launch their own stablecoin to compete with USDC? | | |
| ▲ | mondrian 6 days ago | parent | next [-] | | Good point. In the scenario I described, I'm assuming Stripe will launch their own stablecoin. I tend to think all major tech companies are incentivized to launch stablecoins and give you discounts and perks when you transact using their stablecoin in their own ecosystem. The more of their stablecoin they issue out, the more money they make on interest. | |
| ▲ | sej1 5 days ago | parent | prev [-] | | Stripe already has their own stablecoin: https://www.bridge.xyz/news/usdb |
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| ▲ | boringg 6 days ago | parent | prev [-] | | So then by using this product you are de facto buying short term US debt lowering the debt costs in a way? Is that what you are describing? And Stripe makes money on that short term carry. | | |
| ▲ | asats 6 days ago | parent | next [-] | | Still doesn't answer why you would need any crypto here. Why can't the USD transferred to stripe just be a record in an SQL database saying customer X has N USD in the account, and transferring that around could be done instantly at zero cost by changing an sql row. | | |
| ▲ | ENGNR 5 days ago | parent | next [-] | | There are all sorts of protections around who can be a custodian of someone’s money (for good reason) However there are use cases like running a marketplace, where the platform would like to be able to direct the flow, maybe hold things temporarily in case there are multiple transactions or to split a transaction up between different clients, before paying it out daily or weekly as a lump sum. Often it’s just to avoid fees, because the marketplace operator charges their fees in a different way (like a flat monthly invoice) and they want to assist with money logic as a service, but not be the custodian of the money. Even just knowing that money has moved at all can be useful, without any ability to touch it, and it’s difficult to get permissions from conservative financial institutions, whereas permissionless ledgers make it easy. Crypto can help add that nuance. It’s still your money, but you can give a third party the ability to do some things to assist you, without giving the ability to transfer it all to themself and run away with it. | | |
| ▲ | grey-area 5 days ago | parent [-] | | So, we're just going to pretend those regulations don't exist for cryptocurrencies too? |
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| ▲ | Ekaros 6 days ago | parent | prev [-] | | That sounds like banking or payment processing. Albeit with later Paypal has proven that you do not always need to return funds, but still there is regulatory history on that... Stable coins are new enough and have not catastrophically crashed yet so there is less oversight. | | |
| ▲ | DrBrock 6 days ago | parent | next [-] | | The Terra-Luna stablecoin crash wiped out $50 billion of notional value
https://www.sciencedirect.com/science/article/abs/pii/S15446... It's also a very open secret that the largest Tether stablecoin is not actually 1:1 backed with USD, as they very often claim
https://paymentexpert.com/2025/07/24/tether-stablecoin-regul... | |
| ▲ | notatoad 6 days ago | parent | prev | next [-] | | so the short answer to the question of "why crypto" is just to work around regulation, to be able to act as a bank without the regulations that apply to banks? | | |
| ▲ | mondrian 6 days ago | parent [-] | | Yeah and this is codified in the GENIUS act which passed recently. It enables tech companies to act like banks in certain dimensions, without being regulated like banks. | | |
| ▲ | notatoad 5 days ago | parent [-] | | ah, okay, i see the part i'm missing here. the GENIUS act doesn't let "tech companies" act like banks, it specifically lets stablecoin issuers act as banks. so this is stripe's play to take advantage of that. | | |
| ▲ | boringg 5 days ago | parent [-] | | Nothing better than more financial de-regulation - I can't see that going awry. |
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| ▲ | boringg 5 days ago | parent | prev [-] | | Stable coins are new enough .... and it's in their name... Stable! :) |
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| ▲ | mondrian 6 days ago | parent | prev [-] | | Yeah. Stablecoins create demand for Treasuries which drives the price of Treasuries up and interest rate down. So this pressure lowers debt servicing cost for the US government, and Stripe is the holder of those Treasuries and gets paid interest. This would also serve to counter the drop in global Treasury demand due to recent tariff stuff where presumably our traditional debt holders are losing appetite for US debt... It also creates a kind of strange situation where stablecoins are basically spendable "Treasury tokens". So you give 1 USD to Uncle Sam (via a middle man like Stripe), get back 1 stablecoin. Then you go and spend the stablecoin, and Uncle Sam goes and spends the USD. It's like a weird double spend situation. Prior to stablecoins, you buy a treasury bill with USD, you hold this unspendable treasury bill while Uncle Sam gets USD to spend. | | |
| ▲ | boringg 5 days ago | parent [-] | | If the analogy you say is correct -- I think it makes sense in that its stripe that is actually the individual who is holding the treasury (short term debt) and the stablecoin user can spend it on something, and the US treasury can use the debt. At the end of the day stripe is holding the risk. |
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| ▲ | alchemist1e9 6 days ago | parent | prev | next [-] |
| So many of the crypto skeptic comments on this story are massively out of touch with the products and sophistication of the crypto industry. For those of us who aren’t, the question has basically been flipped to “what does a bank add to this situation?” . I’m typing this shortly after buying my groceries with a visa debit card that was funded 30 seconds before the transaction over Lightning Network with Bitcoin that was sold at a 0.1% fee for USD and immediately then transacted on Visa debit payment network. The reason banks are lobbying so hard recently to close “loopholes” in latest US legislation is because with stablecoins you even need them less and less to hold dollar exposure. The days of traditional banks are likely numbered and the crypto skeptics commenting on HN have their world models upside down. At least that is my view currently. |
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| ▲ | cco 5 days ago | parent | next [-] | | > I’m typing this shortly after buying my groceries with a visa debit card that was funded 30 seconds before the transaction over Lightning Network with Bitcoin that was sold at a 0.1% fee for USD and immediately then transacted on Visa debit payment network. I think I'm confused. You paid 0.1% on this transaction, but if you'd done it with just a Visa debit card tied to a traditional bank account you would have paid 0.0%. Am I missing something? | | |
| ▲ | sundbry 5 days ago | parent [-] | | He gets the benefit of just-in-time conversion to fiat; so his exposure to inflation purchasing power loss is nil. | | |
| ▲ | hdjrudni 5 days ago | parent [-] | | What rate is he getting on his crypto? I get ~4% on my fiat. Some cryptos are doing better than that, so it's certainly possible to beat, but I wouldn't chance the volatility. Unless it's doing better than that.. then I think inflation is eating the crypto, not the other way around? Edit: I see, because Bitcoin isn't adding additional coins, it's "non-inflationary". I think this is moot when you ultimately have to transact through fiat, so the only thing that matters is BTC-USD conversion rate. |
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| ▲ | threetonesun 6 days ago | parent | prev | next [-] | | Unless I read this wrong there were likely two "traditional" banks in this process you just described? At the very least it sounds at least twice as complicated as how I pay for groceries with no obvious benefit. | | |
| ▲ | alchemist1e9 6 days ago | parent [-] | | What banks are those? The debit card issuer is a non-bank issuer on the Visa payment network. LN coins are self custody origin coins. No banks I see, except the grocery store’s on the other side of me. But soon they will accept LN directly in a few years or less. | | |
| ▲ | anthem2025 6 days ago | parent [-] | | Why would they ever bother? To serve a tiny percentage of their customer base that just ends up finding an already supported method anyway? Where exactly is the value for them? | | |
| ▲ | alchemist1e9 6 days ago | parent [-] | | You are obviously completely unaware of the popularity of Paypal, CashApp, Venmo within the general US population and of Square for POS by vendors. The value proposition for everyone, consumer and vendors is both lower fees and ability to easily diversify their income/assets into non depreciating digital assets. Somewhere there is a Steak n Shake presentation that explains their investment into accepting Bitcoin (via LN) has already paid for itself in fees. | | |
| ▲ | fnordpiglet 6 days ago | parent [-] | | The issue is that for Steak ‘n Shake it’s fine because in the card network scheme they’re generally on the hook for repudiated transactions. So they pay fees and on top of that have charge backs from fraud. For you as a Visa card holder you benefit from that situation though because if your card is stolen you can claim fraud or theft and the merchant is often loss liable. In your world you would be the one holding the loss if your card is compromised in some way. This is of course beneficial to merchants. But as a customer I would always prefer a card network backed transaction all things being equal as my personal loss liability risk is considerably lower - almost non existent. This is why credit cards are generally better for the payer. I have no incentive other than ideological to use any crypto payment method. PayPal, Venmo, Cash App tend to not be merchant based transactions but cash like transactions by either people that are unbanked for whatever reason, or doing business person to person, or transacting with a merchant who doesn’t accept credit cards. Stripe (and square) make the logistical side of that less an issue than it was, and today it’s mostly about fees and loss liability transfer back to the originator of the money (as in a theft scenario it’s not the payer whose money is at risk). | | |
| ▲ | alchemist1e9 6 days ago | parent [-] | | Steak N Shake accepts Bitcoin, both on-chain and via Lightning Network. Paypal has USD savings accounts that pay interest, ACH support, and also issues standard credit cards if you like. On top of that they support multiple major cryptocurrencies and allow instant conversion to USD. A high percentage of restaurants and stores in my area now accept CashApp payments directly along with other payments. Many people are using PayPal and Venmo also with merchants in person, and online Paypal is dominate. Square is in the process of rolling out Lightning Network Bitcoin payments to all it’s POS terminals later this year with the merchant having control over how they want to handle such payments, auto convert, partial convert, custody Bitcoin. Could get interesting fast if merchants start offering discounts for non-credit card transactions, which they are fortunately now allowed to and the credit card companies can’t terminate them, what happens when USD stablecoin or Bitcoin payments are offered further discounts by the merchants due to their cost savings and preference? I’m thinking about moving all my ACH auto pay payments over to either CashApp or Paypal also. And remember they both support ACH direct deposits. What services are left for the traditional bank to provide me? FEDwire and international SWIFT wires … and … investment accounts for stocks and bonds … I’d say they are on shaky ground as I know crypto focused companies like Coinbase are looking at how to get into traditional equities and bonds and guess what Robinhood already does that and has gone the other direction and acquired crypto companies. The bigger mystery in all this discussion is why such a significant fraction of HN readers and commenters are so out of touch with what is happening in the real world and real economy with these systems? | | |
| ▲ | fnordpiglet 5 days ago | parent [-] | | I think I touched on all this. These are advantageous to merchants for low fees and loss liability assignment. They offer very little to the payer who is banked and has credit. Of course more merchants are accepting payment methods that are highly advantageous to them, and the payment processing providers capture a better interchange by cutting out the middle men. But the person whose money is being used to transact gains nothing in this and loses repudiation (along with other incentive perks card issuers often provide for their interchange share). This was my point, and I don’t see any addressing of it. For the person paying (you) you literally gain nothing and lose card network loss insurance and other perks. For bank transfers, again, you gain repudiation. You have a window during settlement to dispute the transfer. It’s short but it exists. This is seemingly inconvenient and not obviously useful until someone is trying to steal your money. Then it’s suddenly very useful. As a general society the friction that transfer hold periods provide generally globally reduces financial crimes everywhere and provides global stability to the financial system that didn’t exist prior. These seem like stupid fuddyduddy things banks do but there was a time these didn’t exist and there was a reason they were created and that time was not a better time. It was materially worse for everyone everywhere. Having never existed in such a time makes it hard to understand that such a time might have existed and why it was bad - but for those interested there do exist books that explain how we got here. | | |
| ▲ | Karrot_Kream 5 days ago | parent [-] | | The consumer benefit would be when merchants start charging lower prices to payers if they use crypto. For example, I know many small businesses that offer lower prices, some on purchases as large as $9k (below AML limits), if paying in cash because it's easier to declare less in taxes when using cash. Likewise if a merchant realizes that they pay lower fees and have lower loss on stablecoin transactions, I can see a world where merchants offer discounts for those transactions. Obviously time will tell if there's enough margin to even offer a valuable discount to the purchaser and if merchants will become savvy enough to offer this dual pricing scheme. |
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| ▲ | hdjrudni 5 days ago | parent | prev | next [-] | | So you paid a 0.1% fee for a less convenient way to pay? I just tap my credit card or phone, and then the CC company debits my bank account automatically a month later, essentially giving me a free small loan plus 2% cash back. | | |
| ▲ | alchemist1e9 5 days ago | parent [-] | | When I wrote that it seems I needed to give more context for those who don’t understand the benefits of self custody Bitcoin. 0.1% is fee to convert to USD and in context of converting anything to USD, like stocks or anything one would hold in an investment account it’s a low fee. This means I keep my liquid capital in Bitcoin which has a strong tendency to increase in value and yet whenever I need to spend it, it’s instantly spendable in multiple ways, literally instantly and for a very very low conversion fee. I can also use a CC company and I agree there is a 2% cash back. There are multiple companies that are crypto focused and have issued CC and Paypal issues CC and I can settle the monthly balance using Bitcoin also. What I predict is coming soon, maybe next year or so, if POS support in the US to offer that 2% cash back directly to the consumer from the merchant should they settle in alternative currencies, like Bitcoin, like USD stable coins. The combined issue of interest payments on stable coin balances (custodial) and legal settlement rebates is what has the banks literally freaking out and starting to try and spread FUD about USD stable coins. They know their business models in the payments space is eroding and soon the money markets space is under pressure. |
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| ▲ | sunshine-o 5 days ago | parent | prev | next [-] | | I am curious about the Lightning Network, 10 years in it is still perceived as a failure. What is blocking its adoption? One I can think about is it is hard to accept that if I pay $20 for a pizza today, 6 months later that pizza might have cost me $40. It is a bit irrational but it will prevent most people from using it. This is where the stablecoin thing is genius, one can decide/optimise when get in and out of crypto. | | |
| ▲ | wbnns 5 days ago | parent [-] | | > What is blocking its adoption? There's no native web experience that makes it easy to use Lightning in a browser; this forces everyone to step outside the box to figure out a way to (e.g. install extension or download an app) There's also not much of an app ecosystem for it providing enough utility for people to use it each week/day | | |
| ▲ | sunshine-o 5 days ago | parent [-] | | Interesting, so this is I believe the same problem as all the Ethereum type stuff: you need to have it lives with your keys in the most horrific place in a computer, meaning a browser extension. Or put the web browser in the wallet.
Either way, something like Metamask is really slow and scary. The core Ethereum stuff is pretty elegant but once you want to build an UI you get trapped in hell to plug it to the "web". Maybe the biggest problem of "Web3" is it was built on Web2. |
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| ▲ | boringg 6 days ago | parent | prev | next [-] | | What does a bank do? Many things that crypto can't but probably the number 1 thing compared to crypto ... the bank (via the FDIC) provides assurances for each account for up to $225,000 USD. I wouldn't write off banks that quickly. | | |
| ▲ | derangedHorse 5 days ago | parent [-] | | It's important to note that FDIC doesn't kick in for instances of scams or other unauthorized transfers. It only gives assurances to deposit holders. Stablecoins under the GENIUS Act requires 100% backing and is more stringent than banks since reserve requirements are still 0%[1]. I think it's also useful to focus on stablecoins in a conversation like this rather than crypto at large. [1] https://www.federalreserve.gov/monetarypolicy/reservereq.htm |
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| ▲ | 6 days ago | parent | prev | next [-] | | [deleted] | |
| ▲ | kiitos 6 days ago | parent | prev | next [-] | | i don't know why this fence is here or who named it chesterton but i'm DAMN sure it needs to go!! | |
| ▲ | anthem2025 6 days ago | parent | prev | next [-] | | That sounds like a needless pile of complicity and expense that offers literally zero value in return. Crypto isn’t going to take over anything. | | |
| ▲ | alchemist1e9 6 days ago | parent [-] | | What is complicated? It takes seconds on my phone, must less complicated than writing a comment on HN! The processing fees are lower for vendors than credit card fees if they accept LN Bitcoin. For me the “savings” account is completely self custody held in a non-inflationary non-depreciating currency called Bitcoin. Massive value for everyone by cutting out the legacy banks. As I said earlier, unless you actually do it, and use it, you won’t understand how rapidly crypto is embedding itself and likely will take over in next decade for sure. | | |
| ▲ | kiitos 6 days ago | parent [-] | | it turns out that legal regulations are Actually Good and Really Important | | |
| ▲ | alchemist1e9 6 days ago | parent [-] | | And how did you come to that conclusion? From all the money laundering done by the traditional banks for the cartels once they bribe the right AML personnel? | | |
| ▲ | kiitos 5 days ago | parent [-] | | no, from the lessons that we have collectively learned, from the hundreds of years of history that we've collectively experienced, that have resulted in the banking infrastructure that we have today. it's flawed and it can be improved, no question, but improvements need to reflect a basic understanding of the lessons learned by past experience, regulations were created for a reason, etc. |
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| ▲ | liotier 6 days ago | parent | prev [-] | | > “what does a bank add to this situation ?” In developed states (so, not the USA), regulation that protects the consumer. |
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| ▲ | monkeywork 6 days ago | parent | prev | next [-] |
| The first thing that came to mind to me - and maybe I'm a million miles off here - but all the recent drama around visa / mastercard / etc pressuring sites like Steam to modify their terms of use... maybe Stripe is thinking they can come in and be an alternative by doing it via crypto and hoping their name brings enough trust to cause users to jump on board. |
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| ▲ | brendanfinan 6 days ago | parent | prev | next [-] |
| Some of the customer's money is already crypto though |
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| ▲ | anthonypasq 6 days ago | parent | prev | next [-] |
| total shot in the dark, but im assuming there is much lower regulatory burden to holding lots of crypto than trying to be a bank |
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| ▲ | smoovb 6 days ago | parent [-] | | Said another way, much lower legacy technical debt than trying to be a bank. |
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| ▲ | TechDebtDevin 6 days ago | parent | prev [-] |
| There's over 75 billion in daily tether turnover... do the math. Not everyone is a boomer.. |
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| ▲ | kemotep 6 days ago | parent | next [-] | | There’s an estimated 7,500 billion dollar turnover of fiat currency in forex markets daily. | |
| ▲ | kiitos 6 days ago | parent | prev [-] | | wash trades go in, wash trades go out, you can't explain that! |
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