Stripe initiated its long-awaited support for stablecoin transactions, and the payments company reported facilitating transactions in 70 countries on its first day of operations.
The company didn’t disclose the number of stablecoin transactions or the amounts transferred. Stripe now supports Circle’s USDC on the Ethereum, Solana and Polygon blockchains and Pax Dollar on Ethereum and Solana. Any stablecoin payment made on Stripe’s platform will be converted to U.S. dollars upon receipt and stored in a user’s Stripe wallet, minus a 1.5% transaction fee.
“The integration of multiple blockchains is key here,” said Joel Hugentobler, Cryptocurrency Analyst at Javelin Strategy & Research. “Polygon and especially Solana have much faster and cheaper transactions than Ethereum based products that don’t leverage a Layer 2. The 1.5% fee is rather steep in my opinion, but I’d imagine as more payment providers enter the stablecoin space Stripe might get more competitive.”
Centering Around Stablecoins
Stripe has been advocating for crypto adoption since it added bitcoin as a payment option a decade ago. However, the company had to reverse its stance a few years later, citing high costs and difficulties in processing bitcoin transactions.
Earlier this year, Stripe announced it was working with Coinbase to bring crypto back to its platform, this time focusing on stablecoins, with a particular emphasis on USDC in its digital assets strategy.
Uniquely Suited
Stripe’s clientele, which is dominated by businesses in the e-commerce space, are constantly looking for ways to reach more customers at lower costs. The company believes stablecoins are uniquely suited to fit that need.
“This news is another piece of evidence that substantiates our thesis at Javelin, and that thesis, simply put, is the use of stablecoins will proliferate in the months and years ahead, particularly for cross-border payments such as remittances,” Hugentobler said. “It is telling that participants from 70 countries used this new payment solution.”
“The U.S. economy is stable, relatively speaking, but many other countries have much higher rates of inflation and/or debasement of fiat currencies, limited access to dollars or more stable currencies, or even limited access to viable savings instruments,” he said. “These issues point to a dollar-pegged stablecoin, such as USDC, as a legitimate solution—it’s a faster and more cost-effective way of making payments.”