In today’s hyper-digitalized world, where decentralized finance is rapidly gaining widespread significance, stablecoins are making a major headway. The stablecoin market, especially that of USDC, is increasingly assuming mainstream significance in the high-tech digital economy, being used as the substitute for the US dollar on top cryptocurrency exchanges.
Stablecoins – an edge over cryptocurrencies
While the advantages and disadvantages of stablecoins have been debated by many, their skyrocketing popularity is doubted by none. Stablecoins are a class of cryptocurrencies backed by fiat currencies like the US dollar, and with a redeemable value of 1:1 against it. Since their value is pegged to national currencies, they are relatively less volatile than other cryptocurrencies like Bitcoin and Ethereum, infamous for their incredible price swings.
As such, stablecoins are regarded as a more useful mode of transaction than highly volatile cryptocurrencies. They come with most of the powers of cryptocurrencies but also bring a lot more steadiness in value. Consequently, stablecoins have facilitated a major expansion in the volume of trading digital assets, with their easy liquidity or convertibility into liquid cash.
Stablecoins – backed by top players
The sensational rise of stablecoins has been further accelerated with top players in the financial sector, like Visa, embracing them.
In a brand new initiative, Visa announced that it will support settlements for the USDC stablecoin, where merchants can engage in lightning-fast B2B cross-border transactions easily. To support high-speed performance, Visa has extended its USDC settlement capacity over Solana’s blockchain network. The global payment giant has also launched pilot projects with top merchant acquirers like Nuvei and Worldpay to empower its clients to choose stablecoins over fiat currencies for transactions.
This has come as breaking news in the crypto market and encourages us to step into a brand new era of digital economy. The consequences of Visa’s move have been rather stupendous for stablecoins, especially USDC and Solana. SOL, the native currency of Solana, experienced a tremendous surge by almost 2 percent after Visa’s announcement.
Stablecoins – increasing popularity and B2B benefits
When cryptocurrencies started gaining popularity in the 2010s, they gained major interest from businesses worldwide. This is because cryptos could potentially solve many problems of small and medium businesses when it comes to global trading. However, cryptos were not as stable or dependable as fiat currencies, which made them unsuitable for B2B payments.
When stablecoins emerged, they became game-changers in the B2B sphere. Offering the best of both – cryptocurrencies and fiat currencies, stablecoins empower businesses that want to engage in seamless cross-border trade. Actually, stablecoins bring far more benefits to businesses than investors and traders. Some of the most significant B2B benefits of stablecoins include:
- Efficiency, speed, and lowered costs of cross-border transactions, without the extreme price swings of cryptocurrencies. While cross-border fiat transactions take ages to execute, stablecoin payments are settled in just a few minutes. The sheer speed of stablecoin payment execution is unbeatable, ranging from instantaneous to a meagre few minutes.
- Option to instantly liquidate stablecoins into fiat currencies whenever needed. Since most small and medium businesses tend to function within budget constraints, liquidity is highly crucial for smoothly flowing business operations. Businesses can convert stablecoins into any local currency irrespective of their geographical location. This allows small businesses to function independently of their local markets, and also offers them the flexibility to reach out globally.
- B2B customers get a more affordable and faster payment option, which is not the case for cross-border fiat transactions. Payments in fiat currency come with various fees, which take away a meaty portion of transaction value. They need the approval of central banks and other financial institutions, which delays the process. However, stablecoin transactions involve just the blockchain platform as the sole intermediary. The only transaction cost is the fees for using the blockchain platform, which is significantly less compared to the speed and efficiency.
- With seamless and quick cross-border transactions using stablecoins, businesses have the power to build and maintain healthy trade relations with all parties. And very importantly, stablecoins allow businesses to receive their generated revenues in a matter of minutes. So, they can make salary payments on time, pay supllier bills, ensure healthy cash flow, and cover all liabilities smoothly and efficiently.
That being said, it is important to note that stablecoins are after all, cryptocurrencies, and their transactions are irreversible. In order to encourage wider B2B adoption, it is crucial to have comprehensive global protocols for stablecoins that are flexible yet consistent, risk-based, and emphasize their use cases. Stablecoins, like all other cryptocurrencies, are exposed to operational risks like cyber-attacks and frauds, which highlight the need for robust regulatory treatment of these digital assets.
Final words
Along with strong governing policies, the best way to ensure a scam-free B2B payment environment is through the use of blockchain escrow platforms. Top blockchain escrow service providers, like Uniscrow,ensure the highest standards of stablecoin payment protection in B2B cross-border transactions for their customers. By implementing audited smart contracts in their escrow that manage USDC on the Polygon blockchain, Uniscrow supports quick, seamless, and safe transactions.
It offers the perfect platform for small and medium businesses to capitalize on the rise of stablecoins in the B2B market, with affordable and secure blockchain escrow services. After all, stablecoins are the next big thing in global trade and the key to future B2B cross-border payments.