The broader financial ecosystem is also taking notice of the value proposition of stablecoins. PayPal launched its own stablecoin called PYUSD last year, and Stripe recently announced that it will once again allow its customers to accept cryptocurrency payments via the USDC stablecoin.
Cross-border use cases
Most international B2B payments are facilitated by the Society for Worldwide Interbank Financial Telecommunication (SWIFT) network. This network is a messaging system that sends funds delivery instructions between two banks and moves funds using Nostro and Vostro accounts. These payments can be incredibly slow, taking up to five days in some cases, and add on transfer fees, exchange fees, and tracing fees, not to mention additional costs when intermediary banks are involved. , the cost will be higher. SWIFT payments are also opaque, as senders and recipients do not have real-time visibility into the status of their payments.
The current situation has all the hallmarks of industry disruption. And in situations where one or more of the parties to an international transaction is trading in a volatile currency, stablecoins have additional benefits. High inflation rates, local currency volatility, and reduced access to financial services are driving the uptake of stablecoins in emerging markets, where stablecoins can provide a “stable” store of value. For example, most of Tether’s user base is in emerging markets. Users in Brazil, Argentina, Turkey, and Vietnam have adopted USDT as a “digital dollar” rather than for trading purposes.
