For almost their entire history, despite designs to the contrary, the primary role of cryptocurrencies and digital assets has been confined largely to trading and speculation.
But recent advancements in blockchain infrastructure are positioning digital assets as more functional tools for real-world financial transactions. And the shape that the blockchain industry is now taking as it matures underscores a rising trend among crypto entities striving to increase utility across the financial services ecosystem — a transformation that, if successful, could redefine cross-border payments and simplify cash management for both consumers and businesses.
Still, it is a transformation that many have been waiting for since the first bitcoin came into existence on the blockchain.
That’s why each week PYMNTS rounds up the most pressing crypto and Web3 announcements for our readers, tracking the key data points along the crypto sector’s journey. This week, the news showed that major players in finance and technology are more and more signaling growing confidence in stablecoins and cryptocurrency as credible tools for mainstream payments.
Visa on Tuesday (Oct. 29) launched a money movement partnership with cryptocurrency exchange Coinbase. The collaboration connects Coinbase to the Visa Direct network, letting the exchange’s customers deposit funds into their accounts via eligible Visa debit cards. Users can use the service to transfer funds to their Coinbase accounts, purchase crypto on Coinbase, and cash out funds from Coinbase to a bank account.
Elsewhere, also on Tuesday, the money movement platform Thunes launched a partnership with stablecoin issuer Circle. The collaboration is designed to “accelerate innovation in stablecoin liquidity management,” letting members of Thunes’ Direct Global Network to fund and execute cross-border transactions using USDC, the companies said.
The partnership comes at a moment in which the stablecoin market’s worth has surpassed $170 billion, as noted here earlier this month. And with FinTech giant Stripe buying stablecoin platform Bridge for $1.1 billion, “it’s becoming a harder one for the payments sector to ignore,” PYMNTS wrote.
And it’s all happening at a moment when various players in the crypto world are seeking greater utility across the financial services ecosystem.
Crypto payment innovations are still happening on-chain, too. Cryptocurrency payments solution provider Alchemy Pay on Monday introduced the launch plan for its Layer-1 blockchain. The release noted that Alchemy Chain will offer a “high-scalability infrastructure” designed to accommodate large-scale business applications, with an architecture constructed to process transactions “rapidly and efficiently.”
The announcement follows news from last month that Alchemy Pay’s virtual card had begun supporting Google Pay.
These partnerships underscore a larger trend among crypto entities striving to increase utility across the financial services ecosystem.
Despite these promising developments, regulatory hurdles continue to cast a shadow over the crypto payments sector. Last week, a report from The Wall Street Journal (WSJ) posted Friday (Oct. 25) said that federal agencies are investigating stablecoin issuer Tether for possible violations of sanctions and anti-money laundering (AML) rules.
The company condemned the report. Tether (USDT) is the largest stablecoin by market cap, but it is primarily used as a trading pair on exchanges for liquidity and stability and its regulatory status may cause businesses to hesitate in fully embracing it across their operations, PYMNTS reported Oct. 21.
And in another specter of crypto’s wild west past, one-time FTX executive Nishad Singh learned his fate Wednesday (Oct. 30) afternoon: sentenced to time served, three years supervised release. Singh, former chief engineer at the failed cryptocurrency exchange, was lauded for his cooperation with authorities investigating Sam Bankman-Fried’s pilfering of roughly $8 billion worth of customer funds.
Caroline Ellison, the former executive who played a role in the collapse of the FTX crypto exchange and later became the star witness in the prosecution of FTX founder Sam Bankman-Fried, received a harsher sentence, two years in prison, than the one recommended by the federal Probation Department.
But some exchanges are cleaning up their image. Binance, FTX’s largest competitor, announced Binance Wealth on Tuesday, a wealth management solution from the crypto exchange that lets wealth managers oversee the onboarding of their clients and make investment recommendations, giving support during onboarding and afterward, similar to traditional wealth management.
The crypto and stablecoin ecosystem is growing, but it is still far from reaching its full potential as a foundational part of the global payments system. Yet as consumer demand for faster, borderless payments grows, the integration of stablecoins and blockchain technology into mainstream financial services could change the way money moves across the globe.
Xiang Xu, global COE leader of digital strategy and blockchain at Mondelēz International, and SKUx co-founder and CEO Bobby Tinsley told PYMNTS’ Karen Webster that distributed ledger technology (DLT) and blockchain advances are providing groundbreaking steps forward for the retail and payment-based offer ecosystems.
“Blockchain has traditionally been very crypto-focused as opposed to actually utilizing the ledger for what the ledger is, which is the tracking and traceability of transactions,” Tinsley said. “The ability to provide unmatched transparency to the data that we are powering on behalf of partners, that is where this becomes groundbreaking for retail.”
And PYMNTS spoke last week with Ran Goldi, SVP, payments and network at Fireblocks, and Nikola Plecas, head of commercialization at Visa Crypto, to examine the benefits and myths surrounding blockchain-based payments.
“Blockchain isn’t going to solve world hunger. It’s not a magical fix for every problem,” Goldi said, though it offers an upgrade to financial systems. He also stressed that the real power of blockchain comes from faster, more transparent value transfers, an area where stablecoins are already enjoying more traction.
And although traditional payment systems like Swift can take days to process transactions, Goldi said, stablecoins enable almost instant cross-border payments in “under 10 minutes.”
If the industry can overcome regulatory and technical obstacles, stablecoins may very well serve as the bridge that connects today’s financial system with the decentralized aspirations of tomorrow.
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