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Stablecoins could save companies money on cross-border payments and simplify international transactions, but the digital currencies must be better accepted and understood by consumers before achieving widespread use, payments and fintech executives say.
Consumers and small businesses sending money across borders prefer so-called fiat currencies like the dollar, the euro, or the British pound, they said during a panel at the annual Money 20/20 conference in Las Vegas on Oct. 28.
“At the moment, there is simply not the demand for beneficiaries to receive funds in stablecoins,” John McNaught, head of payouts at the Cincinnati-based payment processor Worldpay, told panelists.
Stablecoins were used to settle roughly $10.8 trillion in transactions in 2023, including cross-border payments, for a 17% rise from the year before, according to the cryptocurrency platform Coinbase. That’s still miniscule though given the consulting firm McKinsey estimates global payments industry processed $1.8 quadrillion worth of transactions in 2023.
Cross-border payments are complicated and expensive.
Sending stablecoins — digital currencies pegged to the value of a traditional currency like the dollar, making their value more stable than the volatile digital currencies like Bitcoin — could simplify that process, McNaught said.
When transactions include fiat and digital currencies, “what we're doing is stitching together different ecosystems that don't really talk to each other,” he said.
Sending a stablecoin and simply converting it to the recipient’s currency removes some of the complexity, McNaught said.
The fintech executive described stablecoins as “cross-border middlemen.”
Stablecoins have existed for about a decade. In recent years, companies like the San Antonio, Texas-based stablecoin platform Bridge made them easier to use, said Cuy Sheffield, global head of crypto at Visa, who also sat on the Oct. 28 panel.
Bridge’s plan to be acquired by payments software company Stripe, disclosed earlier last month, demonstrates the growing intersection of payments and digital currencies.
“What Bridge has done represents a trend we're seeing with many companies,” Sheffield said. Bridge is “starting to pair traditional fiat [currency] infrastructure with stablecoin infrastructure, so both sides can speak the same language.”