2 PAYMENT METHOD PROFILES: STABLECOIN
Fraud/Authentication Process Stablecoins operating on the blockchain results in irrevocable transactions. In addition, and as mentioned previously, stablecoins operate as “push” transactions, which means funds are not able to be returned to a consumer’s wallet. Consequently, this means there is no chargeback- equivalent framework in place for dispute resolution. This leaves fraudulent transactions as an area in need of a solution for stablecoins to become a more widely-used C2B payment method. Cross-Border/FX Capability 729 Stablecoins have been building a strong use case for cross-border payments. Faster transaction times and lower costs are two characteristics that have encouraged growth in stablecoin as a cross-border payment option. 730 As the graph from Coinbase’s Stablecoins and the New Payment Landscape report shows below, cross-border payments in 2023 was a $45 trillion market with business-to-business payments making up over 95%.. Cross-Border Payments and Remittances
$60
2023
2030 (forecast)
$50
$40
$30
$20
$10
$0
Business-to-consumer ecommerce
Global remittance
Business-to-business payments
Sources: International Fund for Agricultural Development, International Trade Administration, FXC Intelligence, Grand View Research, Reuters, Statista, The Economist, World Bank and Coinbase
Graph 2.43 731 Foreign exchange rates and bank fees that are required in cross-border payments are significant. 732 Stablecoins offer merchants an alternative payment method that could lower transaction costs significantly. They can potentially eliminate expensive wire fees which make them good candidates for business-to-business transactions, e.g., merchants paying suppliers. The access to more stable currencies has had led people in developing countries with volatile currencies to store their money as stablecoins instead of their local currency. 733 For example, Tether supports the U.S. Dollar, Mexican peso, offshore Chinese yuan, and gold. 734 A consumer
147
Powered by FlippingBook