Truly Crypto 101
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Truly Crypto 101

An Overview of Financial Payment Companies Providing Stablecoin Services Worldwide

While rules and regulations regarding crypto are still taking shape worldwide, stablecoins’ value in facilitating international settlement and cross-border payments has earned recognition. It is reported that despite dramatic volatility and bearish signs in the crypto market, stablecoin settlements reached about $7.4 trillion in 2022, another record high that surpasses almost all the other large settlement providers and is only second to Visa. Tempted by such a vast market, many payment service providers have started to develop and launch stablecoin settlement services built in-house.

Today Truly will walk you through the global financial payments companies that are dabbling in the crypto space. Let’s dive right in!

The credit card giant Visa has put a premium on the crypto industry in recent years. On top of launching crypto-friendly debit cards with multiple crypto companies, it also forged a partnership with the crypto-focused enterprise payment platform Tribal Credit which allows Tribal to issue business credit cards in local denominations and currencies across Latin America, including Mexico, Brazil, Colombia, Argentina, Chile, Peru, Panama, Uruguay, and the Dominican Republic.

In addition, its research team began working on a blockchain interoperability project in September 2021 named the Universal Payment Channel (UPC) initiative. The project was designed to establish a “network of networks” for CBDCs and private stablecoins to pass through various payment channels. Sadly enough, however, Visa hasn’t provided an update on the UPC for over 12 months.

Yet Visa did not stop its venture into stablecoins. AI Kelly, the former CEO of Visa, spoke at Visa’s annual stockholder meeting before he stepped down on February 1: “We continue to believe that stablecoins and central bank digital currencies have the potential to play a meaningful role in the payments space, and we have a number of initiatives underway.” Similarly, one of the heads of the company’s crypto division suggested that Visa’s crypto strategy targets global settlements with stablecoin and fiat currency.

In terms of investment in stablecoin and crypto settlement, Mastercard, another renowned credit card company, tends to be more practical than the ambitious Visa. To be specific, Mastercard mostly partnered with major exchanges, and its investment focus has never drifted away from its key business — credit cards.

In an announcement on February 10, Bit2Me, the largest Spanish cryptocurrency exchange, revealed its new cashback debit card in partnership with Mastercard. The card offers users up to 9% crypto cashback for all purchases made online or in-store. According to the report, Bit2Me is currently available to users in 69 countries around the world.

Binance is another key partner of Mastercard. In August 2022, Binance announced that it had partnered with Mastercard to launch a prepaid card for the residents of Argentina. The card allows its holders to make purchases and pay bills with cryptocurrencies at over 90 million Mastercard merchants worldwide, both in-store and online. Users can enjoy a seamless transaction in which their cryptocurrencies are converted to fiat currency in real-time at the point of purchase, as well as earn up to 8% in crypto cashback on eligible purchases and enjoy zero fees on ATM withdrawals. And that wasn’t the only case; Brazil became the second country to have a product of this kind in 2023, following the card’s release in Argentina.

Coinbase exchange and Paxos, the famed stablecoin issuer, have also partnered with Mastercard. Within these partnerships, its cardholders can purchase NFT and Mastercard is developing a new tool allowing banks to trade cryptocurrencies so as to help financial institutions to offer crypto trading services.

PayPal is one of the world’s largest payment companies to have moved into crypto and blockchain in recent years. Some states in the United States, such as Colorado, have begun to accept Bitcoin as tax payments through PayPal. PayPal is doing its best to bring all possible blockchain and cryptocurrency integrations to its platform; by the end of 2022, PayPal held $604 million worth of cryptocurrencies, about 90% of which are BTC and ETH, vice president Richard Nash said at the World Economic Forum.

After rolling out the ability to buy and sell crypto on its platform in October 2020, PayPal launched Checkout with Crypto in March 2021 and enabled users to natively transfer, send and receive digital assets between PayPal and other wallets and exchanges in June 2022. To protect users’ privacy, the firm generates a new recipient address for each transaction into one’s PayPal account. And transfers between PayPal users will not incur such fees.

PayPal’s plans to launch its own stablecoin, named PayPal Coin, have been under the spotlight. When such plans were first made known to the public, it was generally believed that they might lead PayPal to “completely become a crypto company”, which could promote the development of crypto and build trust in the company. But in February 2023, with tightening regulations and Paxos, one of PayPal’s partners, being investigated by the New York Department of Financial Services (NYDFS), it was reported that PayPal might shelve its plans to roll out PayPal Coin.

Plaid is a financial services company that focuses on enabling financial service applications to connect with users’ bank accounts and credit card companies. Now, Plaid connects to more than 12,000 financial institutions across the world. Previously, Visa agreed to buy the company for $5.3 billion but scrapped the takeover efforts later.

In 2022, the Plaid network started to support cryptocurrency exchanges such as Binance.US, Gemini, Robinhood, and SoFi, enabling users to integrate their digital assets into other applications. Plaid has launched Wallet Onboard that supports over 300 wallets including Metamask, Coinbase Wallet, Ledger, Trezor, and Gnosis Safe, making stablecoin settlement easier for users. Down the road, the company will extend its reach in the crypto industry, especially in identity verification, to meet users’ security needs in crypto investment.

The Irish-American payments heavyweight’s relationship with cryptocurrencies is full of twists and turns. Stripe supported Bitcoin payments as early as in 2014 but dropped the cryptocurrency four years later, citing its rising fees and long transaction times. In October 2021, however, the company restarted a team for crypto payments.

As a crypto veteran, Stripe has a unique perspective on cryptos’ infrastructure and their potential for wider adoption. The European Central Bank (ECB) has appointed 30 senior business professionals to its market advisory group for the digital euro project, and the 30 members include representatives from Stripe.

At the end of 2022, Orca, a Solana-based automated market maker (AMM), integrated with Stripe to power its fiat purchases and fiat-to-crypto transactions. The Orca onramp marks the first time Stripe has integrated with a decentralized exchange across any blockchain. Besides, before FTX’s debacle, Stripe partnered with the company to launch a crypto business suite, allowing users to buy crypto assets including stablecoins directly, thus enlarging its user base.

Major payment service platforms across the globe have generally been supportive of cryptocurrencies, including stablecoins. To vie for a spot in the era of Web 3, they tap into cryptocurrencies by getting involved in the research development of stablecoins, working with high-profile crypto projects, or facilitating crypto investment through deals with third-party platforms. The participation of these major financial institutions demonstrates that the value of cryptocurrencies is generally recognized by the financial sector.

TUSD, one of the world’s most transparent stablecoins, is proactively working to build more use cases for crypto payments. In January 2023, HyperPay listed TUSD, allowing users to purchase TUSD at the best rates in HyperPay Wallet. The growing market is gradually driving up the adoption of crypto payments among the public. Truly is looking forward to more growth opportunities for cryptocurrencies, including TUSD.

Disclaimer: The aforementioned views do not constitute recommendations for any investment product or trades.

References:

Visa

https://cointelegraph.com/news/stablecoins-and-cbdcs-might-play-meaningful-role-in-payments-visa-ceo

https://cointelegraph.com/news/tribal-partners-with-visa-to-expand-credit-options-for-businesses

https://cointelegraph.com/news/visa-s-crypto-strategy-targets-stablecoin-settlements

https://cointelegraph.com/news/huobi-and-solaris-crypto-to-fiat-debit-card-launches-in-the-eu

Mastercard

https://cointelegraph.com/news/binance-and-mastercard-will-launch-prepaid-crypto-cards-in-argentina

https://www.cnbc.com/2022/10/17/mastercard-will-help-banks-offer-cryptocurrency-trading.html

Paypal

https://cointelegraph.com/news/wef-2022-paypal-looks-to-embrace-all-possible-crypto-and-blockchain-services

https://cointelegraph.com/news/paypal-enables-transfer-of-digital-currencies-to-external-wallets

Plaid

https://cointelegraph.com/news/data-transfer-network-plaid-integrates-4-major-crypto-exchanges

https://www.protocol.com/fintech/plaid-crypto-wallets#toggle-gdpr

Stripe

https://cointelegraph.com/news/solana-based-market-maker-integrates-stripe-for-fiat-crypto-transactions

https://cointelegraph.com/news/stripe-announces-fiat-payment-support-for-cryptocurrencies-and-nfts

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