The road to a market of 3.7 billions of dollars in Stablecoin is full of obstacles

However, there are still big problems to solve before many companies can capitalize on the opportunities that arise. From now on, Stablecoins jump for their original use as poker chips on the crypto market to common exchange media, offering merchants and consumers cheaper and more efficient payment systems.

Among the obstacles that hinder media threshing: an unequal regulatory environment between the main markets such as the United States and the European Union which threatens to create risks of compliance, as well as shortcomings in the knowledge standards of your customer who raise concerns about fraud and illegal activity. In addition, the potential proliferation of competing stalins of large and small issuers could create a complexity that hinders their adoption.

“As with any new form of value, generalized adoption requires regulatory clarity, coherent legal frameworks between jurisdictions and – especially – interoperability with existing infrastructure and assets,” said Tom Zscach, director of innovation at SWIFT, the World Banc Cooperative. “Without this last point, new assets are simply likely to create additional fragmentation in an already complex financial ecosystem.”The success of the eyes of the initial public offer of Stablecoin Done Circle Internet Group Inc. – Its actions are negotiated at around five times their price of supply less than two weeks later – testifies to optimism surrounding the potential growth to be found in this corner once obstructed from the cryptographic market. Meanwhile, financial giants, including Paypal Inc., Banco Santander SA and Deutsche Bank AG are among those who have recently explored or already entered space, while others like Visa Inc. and Stripe Inc. have adapted their existing infrastructure to be adapted to a level. Even President Donald Trump launched a stablecoin via his family business, World Liberty Financial Inc.

For merchants and other companies, the advantages of the use of tokens could be significant: lower transaction costs, faster payments and 24/7 availability. Banks and finches are not the only ones to take note. Amazon.com Inc. and Walmart Inc. are among the major multinational companies that have recently discussed the publication of their own stablecoins in the United States, reported the Wall Street Journal last week, citing unidentified people familiar with the issue. The global supply of stablescoins could inflate up to 3.7 billions of dollars by 2030 if an increasing integration of digital assets in traditional finances and favorable macroeconomic conditions continue, said Citigroup Inc. analysts in an April report. But there is a warning to this prediction. If risks such as delayed regulations, fraud and security problems are not attracted, Citi estimated that the figure could be closer to $ 500 billion, which is nevertheless more than double what it is today. Although the sector has already gained quickly in popularity, stablescoins are still widely used for transactions linked to the cryptocurrency market rather than for commercial payments. The total volume of all stablecoin transactions was nearly $ 4 billions in February, according to data compiled by Allium Labs and Visa. However, only $ 6 billion in Stablecoin transactions were classified as payments were recorded this month, has shown an analysis of the data collected by Artemis, Castle Island Ventures and Dragonfly Capital.

The case of use of payments began to gain ground, even before American legislation officially went to books. Shadeform AI, a startup based in San Francisco, managing a market for providers of artificial intelligence technologies, began to accept stablescoins as payment method in February, facilitated by its existing payment partner, Stripe.

Since then, Shadeform has experienced transaction costs saving up to 70% when a customer chooses to pay using the Stablecoin of Circle USDC, said technology director Ronald Ding in an interview. At stickers’ prices, Stripe invoices 2.9% for payments using credit cards in the United States, plus a small flat-rate thesis, with an additional 1.5% if the customer pays with an international card. Although the automated payments of the compensation house and metal transfers can be cheaper than credit cards, these transactions can take up to a week to erase.

For stablecoin payments, these scratch costs drop to 1.5% – and money arrives instantly. Consequently, customers who paid in the USDC do not have to wait for the check before ShadeForm could give them access to the computing power they bought, and Shadeform is not exposed to potential retrofing, Ding said.

“Being able to save the difference, in some cases, can save us much more on the real benefit we make,” he said.

Companies also find stages useful to rationalize payments to workers from around the world.

Agility Writer, an AI content software company based in Malaysia, began to use stablecoins after losing a developer in Argentina because the costs for traditional payment methods were too expensive and took too long to Claire. Now, around 30% of the company’s external payments go through the USDC, according to CEO Adam Yong, including those made to some of its own software providers.

“What convinced me was to see how smaller our operations are when we do not expect banking transfers or treat currency conversion headaches,” said Yong by e-mail.

Stablecoins also become a practical payment solution for companies with suppliers in areas with limited access to traditional banking services. Win Win Coffee, a merchant based in Philadelphia, tested Pyusd Stablecoin of Paypal and plans to use it to pay the coffee of a farmers cooperative in Colombia.

“Many people need money, and many of these producers are not banished. When they live in areas where banks are not very close, Stablecoin help,” said Matt Nam, co-founder of Win Win. “If we do things more safely and send payments faster, it helps us have a competitive advantage.”

However, stablecoins remain bulky for very large payments due to relatively low liquidity compared to the vast volumes managed by world banks every day. JPMorgan Chase & Co. alone treats about $ 10 billions of daily transactions.

“Where he becomes clumsy, it is in hundreds of millions of dollars,” said Chris Harmse, co-founder of the Stablecoin Bvnk payment company. “If you move interbank flows, it will become clumsy.” This is likely to change as Stablecoins accept a new acceptance by existing payment processors, he added.

Certain jurisdictions such as the European Union, Singapore and Hong Kong now have rules for Stablecoins, but the main players like the United States and the United Kingdom should not have fully implemented regulations for months, even years to come. This uncertainty currently makes it more difficult for companies to weigh whether to use them for payments.

“Companies are in a way stuck because 18 months, from the point of view of the development of policies, are incredibly rapid, almost too ambitious,” said Laura Navaratnam, head of British politics at the Crypto Council for Innovation, speaking on a panel organized by Stripe in London last month. “But from a commercial point of view, it can as well be a decade.”

Consequently, it is difficult for companies to know if they comply with existing rules in areas such as KYC checks and anti-money laundering measures. Operating on a brand new and complex technology means that companies must also be aware of how to use certain services, or spend time and money to convert their back-end systems to work with new suppliers.

And although cross -border payments are a convincing use case for the floors, liquidity is limited for non -dollar tokens, because the vast majority of the stablecoin market of $ 250 billion is denominated in the American currency. It is difficult to effectively adjust payments in local currencies.

The German manufacturing giant, Siemens AG, does not test or consider the stablescoins, in part because they “always bring a certain number of structural drawbacks”, said Heiko Nix, a global manager of the management and payments of the company, in an interview. These include currency conversion stages and FX risk, especially when stablecoins are pointed out in US dollars and used in a euro environment, Nix said.

Instead, the company uses digital payments of the payment network based on JPMorgan, Kinexys’ blockchain, currently dealing around 1,000 payments per month. “We do not see any added value in the stablecoins compared to the money from the token commercial bank, in particular for industrial or treasury use,” said Nix.

Tokenized deposits are generally digital tokens issued by regulated banks which represent complaints on bank deposits. They are, in essence, the balances of the bank account represented on a blockchain.

“The money from the Commercial Bank Tokenized offers all technical advantages – 24/7 availability, programmability, atomic regulations – while retaining the legal and accounting characteristics of conventional treasury,” said Nix. “It fits perfectly into our systems without additional complexity,” he added.

Today, compliance with taxes and local rules is priority for businesses on speed or profitability, according to Gabriele Zuliani, Director of income from the Crypto Exchange Bitso Inc. “unless you provide the clarity of these two fundamental parts – they can like technology and the speed of the colony and everything – but there is a huge barrier for adoption because they do not know are in difficulty, “said Zuliani, speaking during the Stripe event in London.

However, transmitters like Paypal remain positive that the stablecoins will obtain their moment.

“This is not a miracle solution, and I think people sometimes become impatient,” said Zabaneh, vice-president of the product for digital currencies and Paypal funds, in an interview. “These are things we have to work hard.”