Checkout.Com, A $40 Billion Payments Company, Has Begun Accepting Stablecoins As Part Of A Massive Crypto Push

Checkout.com, the online payments provider, has announced that it will use stablecoins to settle payments for its merchants around the clock, making it the final major financial services firm to enter the crypto space.

The start-up, which competes with PayPal and Stripe, announced on Tuesday the launch of a feature that will allow businesses to accept and make payments in USD Coin, a popular stablecoin tethered to the US dollar. Checkout.com announced the new payment mechanism as part of a collaboration with Fireblocks, a crypto security firm.

Stablecoins are an important aspect of the cryptocurrency market, allowing investors to trade digital currencies quickly without going through banks. USDC is the world’s second-largest stablecoin, with a circulating supply of more than $50 billion.

According to Jess Houlgrave, Checkout.com’s head of crypto strategy, the feature will allow businesses to settle payments even on weekends and public holidays, which is presently not possible with fiat currencies. She gave the example of someone purchasing bitcoin from a cryptocurrency exchange. While the customer can receive their bitcoin immediately, due to the way banks and card systems such as Visa and Mastercard function, merchants may not receive the payments for many days.

“Between the time that they’ve sent the bitcoin, and the time that they receive those funds, they have a working capital constraint,” Houlgrave told CNBC on the sidelines of the Money 20/20 fintech conference in Amsterdam.

Checkout.com stated that it had privately tested the service with select clients, supporting $300 million in transaction volumes over the last few months. It now intends to roll out the product globally, with FTX, a crypto exchange based in the Bahamas, among the first to adopt it.

Checkout.com, which was recently valued at $40 billion, is the latest large financial institution to bet big on cryptocurrency. Stripe has introduced its own stablecoin payment service, which allows Twitter producers to get paid in USDC.

Such developments occur at a time when cryptocurrencies have fallen precipitously since their all-time high last year. Since reaching an all-time high of nearly $70,000 in November, the value of bitcoin has more than half.

Stablecoins, unlike bitcoin, are not intended to have large price fluctuations. They are intended to be linked to the value of traditional assets such as the dollar. However, recent events have put the key selling point of stablecoins to the test.

Last month, terraUSD, a so-called stablecoin, crumbled after dropping below its planned dollar peg, undermining investors’ faith in cryptocurrencies. TerraUSD, or UST, used code to keep its price at $1. This is in contrast to other popular stablecoins like as tether and USDC, which are backed by cash and other assets.

Tether, meanwhile, temporarily fell below a dollar on several exchanges as crypto investors abandoned the currency in response to the UST crisis. Tether, which has long faced worries about the stability of its stablecoin, announced in May that it processed more than $10 billion in redemption requests.

Regulators are concerned about the phenomenon. The UK government proposed new plans this week that would give the Bank of England the authority to intervene and control the collapse of some stablecoins if they represent a risk to financial stability. Domestically, Treasury Secretary Janet Yellen expects US lawmakers to pass stablecoin regulation before the end of the year.

(Adapted from CryptoCraft.com)

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