Checkout.com, A $40 Billion Payments Company, Has Initiated Accepting Stablecoins As Part Of A Vast Crypto Drive

June

7

By Awi Khan // in Finance

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AMSTERDAM, THE NETHERLANDS — Checkout.com, an online payments firm, has declared that it will use stablecoins to settle payments for its customers around the clock, making it the only significant financial service organization to do so.

The startup, which competes with PayPal and Stripe, stated on Tuesday that it would introduce a feature that will allow businesses to receive and make payments in USD Coin, a popular stablecoin tethered to the US dollar. Checkout.com confirmed that it has partnered with Fireblocks, a crypto-security company, to offer the new payment method.

Stablecoins are a crucial element of the cryptocurrency market because they let investors fast progress in and out of digital currencies without having to go through a bank. USDC is the world’s second stablecoin, with more than $50 billion circulating a supply.

According to Jess Houlgrave, Checkout.com’s head of crypto strategy, the feature will enable businesses to settle payments even on weekends and holidays, which is now not feasible with fiat currencies. She offered the example of an individual acquiring bitcoin on a cryptocurrency exchange. While the consumer can obtain their bitcoin right away, the way banks and card schemes like Visa and Mastercard work means businesses may have to wait several days to get the payments.

“They have a cash flow limitation between the time they transmit the bitcoin and the time they receive those cash,” Houlgrave told on the sidelines of the Money 20/20 fintech conference in Amsterdam.

Checkout.com said it has evaluated the feature with a limited group of clients and has handled $300 million in transactions in the last several months. It now aims to roll out the product globally, with FTX, a crypto exchange based in the Bahamas, among the first to utilize it.

Checkout.com, which was once valued at $40 billion, is the latest financial institution to make a big bet on the cryptocurrency. Stripe just introduced a stablecoin payment feature to its platform, enabling Twitter creators to be paid in USDC.

Such events happened at a period when cryptocurrencies dropped from their all-time highs last year. Since achieving an all-time high of nearly $70,000 in November, Bitcoin’s price has more than half.

Stablecoins, unlike bitcoin, isn’t expected to have significant price swings. They’re meant to be connected to traditional assets such as the dollar. Recent events, however, have put the central selling point of stablecoins to the test.

Last month, terraUSD, a so-called stablecoin, collapsed after dropping below its targeted dollar peg, leading investors to lose faith in cryptocurrencies. TerraUSD, or UST, used code to keep its price constant at $1. Unlike mainstream stablecoins like tether and USDC, which are backed by cash and other assets, this one isn’t supported by anything.

Tether, meanwhile, quickly dipped below $1 upon many exchanges as crypto investors abandoned the coin in the wake of the UST fiasco. Tether, whose stablecoin’s backing has long been questioned, said it processed more than $10 billion in redemption requests in May.

Regulators are becoming anxious about the trend. The British government presented fresh ideas this week that would empower the Bank of England to intervene and regulate the crash of some stablecoins if they represent a risk to financial stability. Treasury Secretary Janet Yellen also wants stablecoin regulation approved by the end of the year in the United States.

 

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