SoK: Stablecoins in Retail Payments

2026-01-01

AI Summary

This study investigates whether stablecoins can serve as viable alternatives to traditional card payment networks in retail payments, with a focus on differences in authorization, settlement, and dispute resolution mechanisms. By constructing a unified analytical framework, the work is the first to place stablecoins and card networks within a common evaluation paradigm, integrating a Systematization of Knowledge (SoK), payment architecture analysis, and institutional economics perspectives. It introduces CLEAR—a multidimensional assessment framework encompassing Cost, Legitimacy, Experience, Architecture, and Reach. The findings reveal that stablecoins hold conditional advantages in closed-loop environments, cross-border contexts, and high-friction scenarios, particularly due to superior settlement efficiency and programmability. However, they face structural disadvantages in open retail payments owing to inadequate consumer protection, high cognitive burden, and fragmented merchant acceptance.

Technology Category

• Multiagent Systems: Mechanism Design
• Search and Optimization: Evaluation and Analysis
• Reasoning under Uncertainty: Other Foundations of Reasoning under Uncertainty

Application Category

• Security and Privacy: Blockchains and distributed ledgers
• Responsible Web: Measurement, analysis, and circumvention of Web censorship
• Economics, Online Markets and Human Computation: Incentives in network design for Web infrastructures and ecosystems

Abstract

Stablecoins have emerged as a rapidly growing digital payment instrument, raising the question of whether blockchain-based settlement can function as a substitute for incumbent card networks in retail payments. This Systematization of Knowledge (SoK) provides a systematic comparison between stablecoin payment arrangements and card networks by situating both within a unified analytical framework. We first map their respective payment infrastructures, participant roles, and transaction lifecycles, highlighting fundamental differences in how authorization, settlement, and recourse are organized. Building on this mapping, we introduce the CLEAR framework, which evaluates retail payment systems across five dimensions: cost, legality, experience, architecture, and reach. Our analysis shows that stablecoins deliver efficient, continuous, and programmable settlement, often compressing rail-level merchant fees and enabling 24/7 value transfer. However, these advantages are accompanied by an inversion of the traditional pricing and risk-allocation structure. Card networks internalize consumer-side frictions through subsidies, standardized liability rules, and post-transaction recourse, thereby supporting mass-market adoption. Stablecoin arrangements, by contrast, externalize transaction fees, error prevention, and dispute resolution to users, intermediaries, and courts, resulting in weaker consumer protection, higher cognitive burden at the point of interaction, and fragmented acceptance. Accordingly, stablecoins exhibit a conditional comparative advantage in closed-loop environments, cross-border corridors, and high-friction payment contexts, but remain structurally disadvantaged as open-loop retail payment instruments.

Problem

• stablecoins
• retail payments
• card networks
• payment systems
• consumer protection

Innovation

• CLEAR framework
• stablecoins
• retail payments
• blockchain settlement
• payment system comparison