The iGaming world is currently experiencing a stablecoin revolution. Businesses are starting to adopt the technology because it is seen as a more flexible, faster, liquid alternative to the US Dollar.

In the latest in a series of SBC Webinars, Payment Expert News Editor Louis Thompsett sits down with Sergio Pisani, Digital Solutions Consultant, David Rosa, GM of FX Wallets & Payouts at Rapyd and Jean-Michel Azzopardi, a blockchain architect, to explore some of the biggest questions in the stablecoin space today. 

Stablecoins in iGaming 

In discussing iGaming, it’s important to be clear about what we really mean…

The panel outlined how “iGaming” here can be split up in a number of different ways. In its simplest form you have the regulated and the unregulated markets, but David Rosa, GM of FX Wallets & Payouts at Rapyd takes it a step further, “you can split it into three separate geographies: very mature markets, emerging markets and offshore markets”.

Discussion then moved towards how these different markets look at stablecoins in iGaming. 

Sergio Pisani, Digital Solutions Consultant, argues that the markets look at stablecoins, “entirely dependent on where the friction sits”. A European operator with strong banking rails is going to look at stablecoin adoption incrementally, while operators from emerging markets, with unstable, expensive banking solutions and infrastructure are going to look at stablecoin more relatively. 

“Stablecoins are an infrastructural gap, trying to fill an infrastructural gap,” Pisani adds.

US Dollar Dominance

Thompsett points out that USDT (Tether) and USDC make up a large majority of the global stablecoin volume. So what does this mean for operators sitting outside the dollar market?

Pisani says, “USDT and USDC bring liquidity and stability and that’s why they dominate”, with Rosa agreeing, “they solve a real painpoint.” The reality for operators doing business outside of the US is that the dollar doesn’t move in real time, and according to Rose, “this is an industry that loves instant gratification,” which explains why stablecoin usage has grown so much in recent years.

For Jean-Michel Azzopardi, “it’s a no-brainer”. There is a real opportunity here for treasury and b2b and if the industry can get over, what he describes as “the greatest barrier” the issue of cryptography, then iGaming operators can start benefiting from stablecoins benefits, such as no chargebacks, faster settlements and lower fees.

Fragmentation

Not helping stablecoins popularity is the issue of fragmentation. Stablecoin infrastructure is currently fragmented across different chains, wallets and liquidity providers, something that Rosa believes makes it daunting for your average consumer.

The panel was in agreement that the issues in stablecoin come when you try to scale. Moving money especially was highlighted as a messy and overwhelming process, that doesn’t necessarily have to be like that.

“The nerds are overcomplicating it,” joked Azzopardi.

“This is the friction that nobody talks about,” Pisani added, “having liquidity is not enough… having it in the right form, in the right way and at the right time are the real operational complexities in the back end that need to be taken care of before Stablecoins can go mainstream”.

Where to use it

Speed was picked out as one of the main driving forces behind a company adopting a stablecoin strategy. Azzopardi refers back to a previous comment made by Rosa about US banks not moving money immediately, especially when it’s cross border.

“Does your use case require speed?” Azzopardi asks, “then stablecoins will be operationally transformative.”

Pisani brings it back to a point he made earlier, arguing that “speed can only happen if the liquidity is there”.

When asked about operational costs, and the potentially limited use cases for stablecoins as a rail, the Azzopardi said, “if stablecoins are eating into your costs, then you’re doing something wrong.” It’s not that they shouldn’t have a cost, but that the only realistic way they will be adopted by iGaming operators is if they provide a cost saving measure that turns a profit. 

What does implementation look like right now?

Asked to give advice to operators who want to start implementing stablecoins into their systems, Rosa began by saying, “You need to work with the players who are end to end able to cross fiat and stablecoin… the on and off ramping… and maximising the opportunity of letting the clients pay in whatever way is most convenient for them”. 

Pisani agreed, reminding operators to remain compliant and to focus on liquidity, before highlighting the importance of building trust, “We need to remove the fear, it’s real… is this address I’m sending to legitimate?” Pisani stresses the importance of simplifying these things and to start small, because “the successful business will be the one capable of removing these frictions we spoke about”.

For Azzopardi, it all begins with a single question: “why blockchain?”

Azzopardi acknowledges that the stablecoin industry has hundreds of reasons for operators to avoid it, and that no businesses stablecoin adoption will be without its mistakes, but ultimately, “if you understand why you want to use stablecoins, are clear about your driver, at least when the problems come up, you’ll remember why you’re doing this”.

Listen to the full webinar here: https://www.bigmarker.com/sbc-webinars/igaming-stablecoin-playbook-where-it-works-when-it-doesn-t-and-why-it-pays-off