My colleague, Chris Colson, recently posted a blog about the growth of stablecoins that sparked my need to find out how retailers accept stablecoins. Chris found that a large movie theater chain was offering a 10 percent discount on movie tickets and concessions purchased with stablecoin. And thus, a Sunday afternoon field trip to the movie theater ensued.

Learning how to purchase stablecoin and use it to make purchases took some research. After a 45-minute discovery lesson in the theater's lobby, I purchased my movie tickets, my popcorn, and my soda using stablecoin.

If you were wondering why anyone would use stablecoin or why merchants would be interested in taking it, we encountered some of the same questions at the beginning of the pandemic with contactless payments. If we remember, financial institutions scrambled to make debit and credit cards available in our mobile wallets, but at the register, the clerks and payment systems didn't know how to complete the transaction without the actual card.

We had a post, "Contactless Pay: A True Life Story - Federal Reserve Bank of Atlanta" back in August 2020 which reviewed the painful process of making purchases without a physical card present. But the consumer eventually found the ability to make a purchase using their mobile device faster and more convenient. The opportunity for a different payment option for consumers and lower merchant fees may allow stablecoin digital purchases to take off.

Come along as we make a purchase using stablecoins!

Step One: Establish a digital wallet using one of the movie theater's suggested digital wallets (be prepared to include your social security number, home address, email address, birthdate, and phone number). Establish multifactor authentication. I did not have to pay for my initial setup of the digital wallet, and I received an "incentive reward" of $3 in Bitcoin.

Step Two: Establish the account and tie a bank account or card to the wallet for funding purposes. Accept the terms and conditions.

Step Three: Purchase USDC stablecoin through your digital wallet by selecting "Buy" and choosing "USDC". Input the amount to be purchased using the bank account or card connected in Step Two. Hold the amounts in the digital wallet until a purchase is to be made with the retailer. I did have to pay a conversion fee to buy USDC—my $20 US was converted to $19.51 USD Coin—but I earn a 4.10 percent annual percentage yield as a "Reward Rate" that I keep in my digital wallet. So far, I've earned $.02!

Step Four: Download the SPEDN app from the app store. The third-party company uses this app and has an agreement with the movie theater chain. Set up an account and take note that, as part of the terms and conditions, do not hold more funds in the app than what you are willing to spend.

Step Five: "Add Funds" to your SPEDN account. Select the USD Coin. Again, you will receive a reminder "Do not add more USDC than you are willing to spend". Click that you understand. Copy the address to add to your digital wallet.

Step Six: Go back to your digital wallet. Select "Transfer" and "Send Crypto". Paste the copied address from SPEDN. Select USDC. Then select the "network" (block chain) you want to use. You will need to select "Base".

Step Seven: Add the amount you want to transfer, preview the transfers, and select "Send Now".

Step Eight: Go back to SPEDN and touch the USD Coin blue bar in center of the screen. Click the "Spend" button. Select your retailer. I selected the large chain movie theater.

Step Nine: A QR code is displayed which will be scanned by the retailer as a gift card transaction for the purchase of the tickets and concessions.

Easy!

While this wasn't the smoothest payment process, I got the promotional 10 percent off my ticket and concessions. My next purchase at a popular fast food Mexican restaurant was easier, though I did not receive any bonus, discount, or reward. I did, however, get a puzzled look from the cashier.

It may take some time for stablecoin payment transactions to become a "go to" option, but let's not forget how slowly it took contactless payments to become commonplace. We may need to revisit this field trip by end of this year to see what has changed (or not)...To Be Continued.

Portrait photo of Nanci McKenzie
By Nanci McKenzie, payments expert, Atlanta Fed Payments Forum