The total value of the stablecoin market is over $170 billion.
That’s a big number. And with news on Monday (October 21) that fintech giant Stripe has reportedly acquired stablecoin platform Bridge for $1.1 billion, this is becoming harder for the payments sector to ignore.
Stripe is not alone in the growing interest in stablecoins, with historical use cases for these digital assets as fundamental trading pairs and sources of liquidity within crypto exchanges and the broader Web3 economy. The fintech sector is also gaining attention as it increasingly finds utility beyond that.
A stablecoin is a cryptocurrency designed to maintain stable value by being pegged to a reserve asset (usually a fiat currency such as the US dollar or euro), and is a cryptocurrency that is designed to maintain stable value by being pegged to a reserve asset (usually a fiat currency such as the US dollar or euro). It is emerging as a powerful tool to bridge the gap between of cryptocurrencies. The ability of blockchain technology to provide the efficiency and transparency while offering the ease of use and stability of fiat currencies is critical to integrating blockchain-based assets into the mainstream financial system.
For payments professionals, understanding the role of stablecoins and real-world use cases is essential to staying relevant and competitive in today’s digital economy.
Read more: Visa, PayPal and others could bring practicality and legitimacy to stablecoins
How stablecoins are bridging cryptocurrencies and fintech
The potential of stablecoins to optimize cross-border payments and provide alternative payment solutions, such as within regions with complex commercial transactions and less stable fiat currencies, is an innovative digital asset class for the financial services sector. is the basis of interest in
Just recently on Thursday (October 17), payments infrastructure provider BVNK launched a partnership with stablecoin USDC issuer Circle, aimed at promoting the usefulness of the USDC stablecoin for BVNK’s customers. did. And BVNK is not the only one experimenting with cryptocurrencies.
For example, PayPal completed its first business payment to EY earlier this month using its stablecoin PYUSD, while Visa is using its stablecoin and tokenized deposits to issue fiat-backed tokens. Launched a new platform for banks. Meanwhile, Coinbase is also expanding the ways businesses can pay through its Coinbase Prime intermediary platform.
Other payment providers and fintech companies are integrating stablecoins into their platforms, allowing users to use these assets to make payments and settle accounts. Major stablecoins such as USDC and USDT are compatible with various blockchain networks, enabling interoperability and flexibility when connecting different payment systems. This integration facilitates smooth transactions between digital wallets, bank accounts, and other payment platforms, creating a seamless user experience.
For example, Stripe has allowed U.S. merchants to accept Circle-issued USDC through its online checkout page since October 9th, and has since allowed merchants to accept payments in stablecoins. In the first 24 hours, Stripe said it saw customers from even more countries. More than 70 countries buy products using that payment method.
Stripe announced in April that it would reinstate cryptocurrency payments after suspending them in 2018.
Related article: What CFOs need to know about expanding the use of stablecoins
Which stablecoin is best?
The stablecoin landscape is dominated by a few large players. Knowing which stablecoins are best suited for which purposes is important to getting the most out of your stablecoins. For example, Tether (USDT) is the largest stablecoin by market capitalization, but it is primarily used as a trading pair on exchanges for liquidity and stability, and its regulatory status makes it difficult for companies to use Tether across their operations. may hesitate to fully adopt it. The European Union’s Cryptoassets Market Regulation (MiCA) introduces stricter supervision of cryptocurrency companies.
Binance USD (BUSD), the third largest stablecoin, is similar to USDT in its structure and usage, serving important purposes across the broader Binance cryptocurrency ecosystem and bypassing traditional banking operations. It serves an important purpose in remittances and cross-border remittances.
USD Coin (USDC) is the most widely accepted stablecoin among institutions as a payment, remittance, and reserve asset, but banks like JP Morgan have also created their own native tokens. JPMorgan became the first major US bank to introduce its own digital token for real-world use in 2019, with blockchain-based cryptocurrency to enable “instant transfers between institutional accounts” said it was created.
Stablecoins differ in terms of regulatory compliance, and businesses should assess their respective risks and compliance requirements.
See more: Acquisitions, Bridge, Circle, Coinbase, Cryptocurrency, Fintech, News, PayPal, PYMNTS News, Stablecoins, Stripe, Tether, USDC, USDt, Web3
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