Can stablecoins save US freelancers from Venmo fee hike? Industry weighs in

According to Dan Romero, as Venmo introduces higher fees, stablecoins could emerge as a potential lifeline for 1099 workers.

Following news of mobile payment service Venmo’s transaction fee hike, Farcaster co-founder Dan Romero suggested “a stablecoin payments app” for U.S-based freelancers. The PayPal-owned mobile payment service’s new fee structure has resulted in community backlash.

Romero’s statement posed stablecoins as the solution for “1099s.” This refers to workers subject to the U.S. Internal Revenue Service Form 1099 — including freelancers and independent contractors.

Financial analyst Ross Hendricks commented on Venmo’s increase in transaction fees in an X post on May 23, stating, “[PayPal] just flipped on the monetization switch for Venmo.”

One X user responded to Hendricks’ post, sparking the narrative shift to crypto with three words:

“Crypto fixes this.”

This statement was countered shortly after by Hendricks, who questioned the current state of cryptocurrency transfers. The co-founder of the Farcaster decentralized social network asked:

“What is the consumer app with hundreds of millions of users that enables seamless, instant crypto transfers free of charge?”

Brian Armstrong, co-founder and CEO of Coinbase, quickly rose to the occasion, replying that the stablecoin Circle USD (USDC) on Base is “giving it a shot.”

Formerly a senior executive at Coinbase, Romero remarked upon Armstrong’s response to the discussion with one word:

“Based”

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Hendricks suggested that “maybe things could change” but expressed skepticism considering USDC being sent through Coinbase “for everyday transactions.”

This skepticism was followed up by another X user, stating:

“You just described a great business opportunity. Yeah sending money on Venmo to be robbed by PayPal or sending on Coinbase. Why pay 2.99% when you can pay nothing?”.

The discussion follows Coinbase Chief Legal Officer Paul Grewal’s announcement on May 23 that XRP was once again trading on Coinbase in New York.

After the United States Securities and Exchange Commission (SEC) filed a lawsuit against Ripple in 2020, many centralized exchanges, including Coinbase, delisted XRP. The SEC accused Ripple Labs of selling unregistered securities, leading to these delistings.

Following Judge Analisa Torres’s 2023 ruling that secondary sales of XRP do not qualify as securities transactions, centralized exchanges began to reverse their stance and relist the controversial digital asset.