Cryptocurrency observers these days must feel as if they are suffering from a sense of déjà vu.
Polymarket, a cryptocurrency-based prediction and betting platform, has been in the news for millions of dollars in bets placed on the recent US presidential election despite a ban on US users, but Web3 The biggest payments and commerce headlines came on Monday (October). 21) Stripe confirms plans to acquire stablecoin payment platform Bridge.
“Stablecoins are room-temperature superconductors for financial services. Thanks to stablecoins, businesses around the world will benefit from significant improvements in speed, coverage, and cost in the coming years. Stripe is building the world’s best stablecoin infrastructure,” Stripe CEO Patrick Collison said in the announcement.
Sound familiar?
Cryptocurrency proponents have argued since the first Bitcoin was minted that blockchain-based digital assets are the key to speeding up and democratizing global payments and commerce, while also making it cheaper to move money. Ta.
However, despite these promises, the adoption and scalability of cryptocurrencies in everyday payments and commerce remains a challenge, especially as regulatory oversight and technical hurdles remain.
So, is the rise of stablecoins just a déjà vu for the crypto industry, or is there real disruption? Only time will tell, but until then, PYMNTS’ weekly Web3 and blockchain news roundup may hold some clues.
Read more: Web3 of the Week: Usability and network expansion drive stablecoin momentum
Stripe’s bet on stablecoin payments
Approximately 30 million users currently move $3.2 trillion in stablecoins every month because traditional payment rails are too difficult, slow, and expensive. Bridge, the stablecoin company that Stripe announced this week it would acquire for $1.1 billion (the deal is still pending and is expected to close in the coming months), is a company that will help businesses move and store their stablecoins. , we are building the software infrastructure to enable acceptance.
“We both believe that an increasingly globalized world needs better money. We need money that can move across borders, freely available to anyone in any country. Access, Bridge CEO Zack Abrams said in a statement announcing the company’s acquisition.
He added that stablecoins will become the core infrastructure for global money transfers, saying, “It’s not because consumers or businesses inherently want cryptocurrencies, it’s because stablecoins solve significant financial problems. It will be resolved,” he added. This makes money easier to move, more economical to hold, and cheaper to send than ever before. ”
On October 10, before announcing the deal with Bridge, Stripe announced that in the first 24 hours after allowing merchants to accept stablecoin payments for online transactions on its platform, Stripe expanded its customer base in more than 70 countries. announced that it was purchased using that form of payment.
PYMNTS on Monday reveals what every payments professional needs to know about fiat-backed digital assets as it bets on stablecoins as a mechanism to bridge the gap between traditional finance and blockchain technology I made it.
Just last Thursday (October 17), payments infrastructure provider BVNK launched a partnership with stablecoin USDC issuer Circle, aimed at accelerating the usefulness of the USDC stablecoin for BVNK’s customers. did. And for payments professionals, understanding the role and real-world use cases of stablecoins is essential to staying relevant and competitive in the digital economy.
Related article: What CFOs need to know about expanding the use of stablecoins
Can stablecoins bridge virtual currencies and fintech?
Despite the promise of stablecoins in global payments, the adoption and scalability of cryptocurrencies in everyday commerce remains challenging due to several interrelated factors.
Perhaps the biggest factor is the fact that regulations for cryptocurrencies, including stablecoins, vary by region, creating uncertainty for businesses and consumers. While some jurisdictions have established crypto-friendly policies, others have imposed strict regulations or outright bans, making it difficult for businesses to develop consistent and scalable payment solutions. It’s getting difficult.
To that end, on Wednesday (October 23), an executive from crypto company Circle said that formal legislation for the stablecoin market in the UK is “within months, not years” before it is introduced. He was reported to have pointed out that “there are some regulations.” In order to catch up with the European Union, it has begun enforcing stablecoin regulations based on the Market for Crypto Assets (MiCA) Regulation.
Stablecoins, as their name suggests, are pegged to fiat currencies to minimize volatility, but their stability depends on the reliability of the underlying mechanism. Cases such as the collapse of the algorithmic stablecoin TerraUSD (UST) have raised concerns about the security and reliability of some stablecoins. Even when backed by fiat reserves, there are questions about the transparency and regulation of these reserves.
Widespread adoption of stablecoins for payments requires trust from consumers and merchants. Concerns over the transparency and control of stablecoin reserves are discouraging people from using stablecoins for day-to-day transactions, especially for projects that are unregulated or poorly audited. .
At the same time, some merchants are accepting cryptocurrencies, but the infrastructure for crypto payments remains fragmented. Businesses may face technical, legal, and financial challenges when trying to integrate cryptocurrency payment solutions, and there is a lack of merchants willing to adopt and offer these options to consumers. Limited in scale.
As the industry evolves, it will be important to find ways to overcome these challenges while building a robust and user-friendly infrastructure for cryptocurrencies to become mainstream payment solutions.
More information: blockchain, bridges, cross-border payments, crypto payments, cryptocurrencies, fintech, news, Patrick Collison, PYMNTS news, stablecoins, Stripe, Web3
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