SOLUTION SPOTLIGHT Stablecoins
Stablecoins: a thoroughbred payments solution
D igital currencies are typically seen as a form of investment or a store of value and they can be all these things, but for many businesses one of their most valuable uses is as a route to cheaper and faster payments. This use case for blockchain-based currencies is now coming to the fore with the growing use of stablecoins, which are set to be one of the most significant growth areas of digital currency in 2025. Stablecoins have already been growing fast and by the end of 2024, the market capitalisation of all stablecoin reached USD$200bn. Much of this growth is being driven by their potential to transform the global payments system, not just for companies involved in the digital currency sector, but for any business that makes frequent international payments. What are stablecoins? Stablecoins, like other cryptocurrencies, are based on blockchain technology but rather than having an entirely free-floating value determined by investors or speculators, stablecoins are pegged to a specific currency, for example the USD or EUR. While the value of stablecoins can deviate slightly from that of their underlying currency, they do not undergo the same volatility seen with pure cryptocurrency. It is this peg to a fiat currency, combined with the payments and transfer efficiency possible with a digital currency, that creates the unique use-value of stablecoins. International payments Transferring money across borders to overseas divisions or to pay suppliers can be a laborious and slow process, taking days or even weeks to complete. Banks’ protocols, regulation and creaking technology of payments systems creates delays and costs. A typically international payment via SWIFT, for example, takes anything between two and five days. Timings vary depending on a raft of factors outside of any business’ control. In fact, traditional international
payments are a bit like an international rail journey, involving multiple stations, connecting trains, different tickets, and a number of different rail companies. Stablecoins can be transferred instantly, at lower costs and more transparently than traditional bank- based payments networks. In essence, payments and transfers by stablecoin cut through the multiple systems and third parties involved in traditional methods, offering a unified payments system available to any business making cross-border payments. Simplicity security and certainty Using stablecoins for payments is remarkably simple. All that is required is a payment account and a linked digital wallet for storing stablecoins – such as a BCB Crypto account. BCB allows for multiple sub-accounts each denominated in a different crypto to fiat currency. Fiat currency can be exchanged into stablecoins without leaving BCB’s platform and then payments can be made to any other digital wallet in the world. Some businesses may be nervous about making payments via a digital currency, but with the right payment service provider, stablecoin transfers can be more transparent and more secure than traditional methods. BCB’s crypto accounts are operated to the highest regulatory standards, in line with our French Digital Asset Service Provider (DASP) registration. Your crypto assets are stored in our
institutional-grade custody solution, secured with advanced hardware secure module (HSM) technology. BCB’s ‘regulation first’ principles, supported by our experienced compliance and transaction monitoring capability, mean all our payments are carried out in full compliance with the requirements of all jurisdictions in which we operate. This includes a clear record of all remitters and receivers of international payments as required under the Financial Action Task Force (FATF) Travel Rule. Stablecoin choices There are a wide range of stablecoins available globally, and the market and technology behind it continues to evolve. Regulatory consultations and planning for stablecoin are underway in many markets, including the UK, but this is a sign that regulators themselves recognise the potential of this new international payments model to revolutionise international business. BCB aims to remain agnostic and agile, meeting all regulations in whatever market clients need to operate, while ensuring the flexibility to pivot rapidly in response to that changing market and developing regulation. Stablecoins’ future potential The already formidable strength of stablecoins in streamlining international payments is just the beginning. Looking ahead, it has the capacity to streamline core business operations. As well as providing more efficient payment rails for international remittances, blockchain technology provides an automatic record of transactions. In principle, payments and reconciliation against invoicing could be contained within a single process – or reconciliation at source. The capacity for blockchain- based currency to combine data with payment has led some to call the technology ‘programmable money’. Fast and effective payment is the most immediate force driving the rapid growth in stablecoin today, but fiat- pegged digital currencies have the potential for even greater transformation of business processes. ◆
Some businesses may be nervous about making payments via a digital currency, but with the right payment service provider, stablecoin transfers can
be more transparent and more secure than traditional methods.
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