Recent Events Set B2B’s Crypto Course for Stablecoins and CBDCs

Bit by bit, stablecoins may crowd out other cryptos — and here we mean the digital offerings not backed by fiat or other holdings —  in commercial (B2B) commerce.

A few recent headlines bear out that sentiment.

On Tuesday (June 7), for example, payments provider Checkout.com said that it was launching its stablecoin settlement solution in tandem with crypto payment technology from Fireblocks.

The automatic fiat-to-stablecoin payouts, the companies said on Tuesday, enable crypto payouts with the stablecoin USDC, 24/7/365.

Read also: Checkout.com Teams With Fireblocks On Stablecoin Settlement Tool

Elsewhere, Terry Clune, founder and chairman of TransferMate told PYMNTS in an interview that  “you don’t need a volatile cryptocurrency in the middle of that to add unnecessary risks to the journey from A to B,” he said. “Instead, government-backed stablecoins are a logical way to do that, and we see that as being the future of money movement.”

Sidestepping Volatility

That contention is one that speaks volumes to one of the key issues with crypto: The wild price swings render it difficult to gain visibility into final pricing and settlement. Stablecoins are relatively more, well, stable, tracking parity with, say, the U.S. dollar or other currencies. In that dollar-backed scenario, since the dollar exists as the world’s trading currency, a dollar-backed stablecoin would have some appeal in cross-border trade.

PYMNTS’ own research found toward the end of last year that a significant percentage of multinational firms — more than half of them — use at least one crypto. A bit more than 30% used Bitcoin, followed closely behind by stablecoins at 29%.  That neck-and-neck showing hints that Bitcoin may not enjoy a much of a “top of mind, top of wallet” status in B2B.

The Bank of International Settlements (BIS) chimed in a bit on the matter, in a report issued Tuesday.

In the report, titled “Blockchain Scalability and the Fragmentation of Crypto,” the takeaway is that “fragmentation means that crypto cannot fulfill the social role of money.” Part of that has to do with the mechanics of minting the digital coins — blockchains have production limits, which means the costs of the transactions gets higher, which in turn spurs users to seek out other blockchains (and, thus, fragmentation is in the offing).

It should be noted here that the members of the BIS — namely central banks — have been leaning toward developing and deploying their own central bank digital currencies. Those digital forms of currency (not “pegged” like stablecoins) may arguably be safer than stablecoins, which in recent days have not kept the pegs as well as some might have thought.

Read also: Breaking the Buck May Break Faith in Currency-Pegged Stablecoins

The jockeying will continue, but it seems likely that stablecoins and CBDCs may find favor in the worldwide dealings between buyers and suppliers.