Thursday , January 23, 2020

Libra Put Stablecoins in the Spotlight. Now BitPay Announces Support for Three of Them

Facebook Inc.’s Libra cryptocurrency may be struggling with regulators globally, but that doesn’t mean blockchain processors aren’t moving forward with other stablecoins. Atlanta-based BitPay Inc. on Tuesday introduced payment acceptance and settlement services in a trio of stablecoins whose value is tied to the U.S. dollar: Circle Internet Financial Ltd.’s USD Coin, the Gemini Dollar, and Paxos Standard Token.

Stablecoins are so-called because they remain more or less stable in value. By contrast, coins like Bitcoin have been known to drop or rise drastically in value even while a transaction is in progress, complicating key functions such as calculating transaction fees. Pairing the immediacy of cryptocurrency payment with this stability in value has been seen as a top advantage for stablecoins.

 “The pairing of crypto-payment acceptance with a stablecoin like the Gemini dollar—which combines the crecitworthiness and price stability of the U.S. dollar with blockchain technology—is powerful,” said Joshua Rawlins, managing director of financial operations at Gemini Trust Co. LLC, in a statement. “Merchants benefit from faster, cheaper, and fraud-resistant payment settlement, and consumers benefit from the ease of using cryptocurrency without worrying about price fluctuations.” Gemini is a trust company regulated by the New York Department of Financial Services.

Now, 8-year-old BitPay hopes to tap into the advantages of combining value stability with the global trend toward immediate payment. The company processes cryptocurrency for more than 30,000 merchants globally. 

“Accepting or paying with stablecoins opens up new possibilities for global businesses that require the stability of the dollar but the security and efficiency of blockchain payments,” said BitPay chief executive and cofounder Stephen Pair, in a statement. “Businesses can invoice international customers without the need for costly, complicated cross-border wire transfers. Customers can send and receive payments using fast, efficient, and volatility free dollar-pegged stablecoins.”

While it is the best-known stablecoin, Libra has yet to launch. It has evoked fierce criticism from regulators and lawmakers both in the United States and Europe, a reaction that has caused several companies to withdraw as founding supporters. Still, some 21 remaining backers in October elected a board and appointed executives to oversee the project.

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