Checkout.com gets into crypto with stablecoin payment feature – Reuters News in France and abroad

The logo of the payments start-up Checkout.com.

Checkout.com

AMSTERDAM — Online payments company Checkout.com said it will settle payments for its merchants around the clock using stablecoins, making it the latest major financial services firm to dabble in crypto.

The startup, which competes with PayPal and Stripe, announced on Tuesday that it is launching a feature that allows businesses to accept and make payments in USD Coin, a popular stablecoin pegged to the U.S. dollar. Checkout.com said it offers the new payment method through a partnership with Fireblocks, a crypto security company.

Stablecoins are a key part of the crypto market, helping investors quickly trade digital currencies without having to go through banks. With a circulating supply of over $50 billion, USDC is the second largest stablecoin in the world.

The feature will allow merchants to settle payments even on weekends and holidays, which is currently not possible with fiat currencies, according to Jess Houlgrave, head of crypto strategy at Checkout.com. She used the example of someone buying bitcoins from a crypto exchange. While the user can get their bitcoin immediately, the operation of banks and card schemes like Visa and Mastercard means that merchants may not receive the funds for several days.

“Between the time they send the bitcoin and the time 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 said it tested the feature privately with select customers, facilitating $300 million in transaction volumes over the past few months. He now plans to roll out the product globally, with Bahamas-based crypto exchange FTX among the first to use it.

Last valued at $40 billion, Checkout.com is the latest major financial institution to bet big on crypto. Stripe recently launched its own stablecoin payment feature, allowing Twitter creators to be paid in USDC.

Such developments come at a time when cryptocurrencies have fallen sharply since the peak of a seismic rally last year. Bitcoin has more than halved its value since an all-time high of nearly $70,000 in November.

Unlike bitcoin, stablecoins are not supposed to fluctuate so much in terms of price. They are designed to be tied to the value of traditional assets like the dollar. But recent events have tested the main selling point of stablecoins.

Last month, a so-called stablecoin called terraUSD imploded after falling below its expected dollar peg, shaking investor confidence in cryptocurrencies. TerraUSD, or UST, used the code to maintain a price of $1. This is different from more traditional stablecoins like tether and USDC, which are backed by cash and other assets.

Tether, meanwhile, also briefly slipped below one dollar on many exchanges as crypto investors fled the token due to panic over the UST debacle. Tether, which has long faced questions about backing its stablecoin, said it processed more than $10 billion in redemption requests in May.

Regulators are concerned about the phenomenon. Last week, the UK government announced new proposals that would give the Bank of England the power to step in and manage the collapse of certain stablecoins if they pose a risk to financial stability. In the US, Treasurer Janet Yellen also wants US lawmakers to approve stablecoin regulations by the end of the year.

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Checkout.com gets into crypto with stablecoin payment feature – Reuters News in France and abroad


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