Payment gateway Checkout.com is getting into the stablecoin business. Its new stablecoin-based service already has a major cryptocurrency exchange.
Checkout.com and USD Coin: the end of payment delays
Checkout.com announced in a June 7, 2022 release that it is launching a stablecoin payment feature.
Specifically, its users will be able to accept payments in USD coin (USDC). And to be able to offer this new payment method, Checkout.com has partnered with Fireblocks.
Beyond the technical aspect, what are the real stakes of this initiative? This latest initiative is certainly a delight for stablecoin holders, but it also solves a fundamental problem for businesses.
With this new feature, Checkout.com customers will be able to instantly and automatically convert USDC to fiat currency.
These conversions can be performed 24 hours a day, including weekends and holidays. The situation was different with traditional settlement methods. Companies did not receive payments in their bank accounts until several days after they were made.
This delay creates working capital constraints. This new feature eliminates this time gap and solves this problem.
From testing to the first global steps with the USDC
Checkout.com only supports the USDC at this time. However, it plans to add other stablecoins to the list.
In the meantime, Checkout.com is now focused on rolling out its USDC settlement solution globally. And the FTX exchange is among its first customers.
Prior to the public launch, the company had already tested the payment method with a few of its customers. It facilitated $300 million in transaction volumes.
Stablecoins not so stable, unpredictable regulators
Checkout.com’s plunge into stablecoins is obviously good news for the industry. USDC’s adoption, and soon that of its competitors, is after all backed by a payments giant. The company’s latest valuation is $40 billion.
But this type of move raises questions about the risks to companies like Checkout.com and its customers.
The collapse of the terraUSD (UST) has shown that a stablecoin can in practice lose parity with its anchor currency. Checkout.com and its customers have to take this catastrophic scenario into consideration.
But above all they are exposing themselves to regulatory risks. They are indeed not safe from the implementation of a strict regulatory framework on stablecoins.
Especially since the regulators do not necessarily see these crypto-currencies as competitors of fiat currencies in a good light. They could impose annoying restrictions on their use.
Checkout.com wants to seize the opportunities offered by stablecoins with this new feature. However, the London-based company will have to adapt to the mood of British regulators towards the sector.
