With blockchain’s development and Stablecoin adoption, more traditional businesses are exploring Stablecoins for overseas collection and payments. This trend is evident among export-driven businesses, especially in emerging markets like Latin America, Africa, and Southeast Asia, where dollar shortages, local currency volatility, and capital flight controls persist. Pegged to fiat currencies like the US dollar, Stablecoins provide a novel solution for payments and collections.
Advantages of Using Stablecoins for Payments and Collections
1.Mitigating Exchange Rate Volatility Risks
Currencies in emerging markets often exhibit high volatility, exposing businesses to significant exchange rate losses during the collection process. Stablecoins, pegged to major fiat currencies like the US dollar, effectively reduce foreign exchange risks, increasing the certainty of revenue collection.
2.Enhancing Cross Border Payment Efficiency
Traditional cross border payments typically involve banks or third-party payment companies, resulting in complex procedures, lengthy processing times, and high transaction fees. Leveraging blockchain technology, Stablecoins realize peer-to-peer instant transfers, remove intermediaries in the payment chain, therefore, significantly shortening payment cycles and reducing transaction costs.
3.Overcoming Capital Flight Control
In countries with stringent capital flight controls, such as the Philippines, Indonesia, and Malaysia, businesses may encounter difficulties in timely transfer of funds through traditional banking channels. Stablecoin as a payment instrument travelling on blockchains can effectively remove money movement restrictions.
4.Rapidly Expanding into New Markets
Many developing countries suffer from inadequate banking infrastructure, Stablecoins offer consumers in these countries a modern and digital payment solution, enabling businesses to rapidly penetrate emerging markets and acquiring new customers.
Challenges of Stablecoin Adoption
Although Stablecoins offer numerous opportunities for businesses, their adoption faces a series of challenges
Key steps to implement Stablecoin for Payments and Collections
Alignti provides professional consulting services and technical support to help traditional businesses implement Stablecoin payments
