According to a Bloomberg report published on January 22, 2020, premier stablecoin Tether (USDT) is witnessing a strong surge in demand by small merchants primarily based out of Asia and Europe.
Tether Experiences Surprising Adoption
Cryptocurrencies like Bitcoin (BTC) have existed for more than a decade now but their real-world adoption is still minuscule compared to their life. Stablecoins provide a healthy alternative to cryptocurrency enthusiasts who are not the biggest fans of their notorious price volatility. For the uninitiated, essentially, stablecoins are digital currencies that are typically pegged to fiat or a basket of fiat.
Today, USDT is arguably the most famous stablecoin in the cryptocurrency industry. The reasons for USDT’s popularity, however, can be contentious.
A new report by Bloomberg posits that an increasing number of businesses such as importers and exporters of goods in Asia and Europe are using stablecoins like USDT and USD Coin. Transactions with suppliers and vendors hover around the $10 million mark for a single day at Singapore-based QCP Capital.
Darius Sit, Managing Partner, QCP Capital, said:
“They are just using this as an alternative to banks. This is crypto going back to its roots.”
The Benefits of Stablecoins
A representative from Moscow-based payment-services provider B2BinPay told Bloomberg that stablecoin transactions already amount for millions of a month in its routine business. The exponential growth in the use of stablecoins can also be attributed to their superior settlement speed, and their ability to avoid government capital controls and oversight.
Genvieve Iugrinov, Product Manager, B2BinPay, said:
“As you know, transactions conducted in blockchain are irreversible, so they cannot be canceled, rejected or confiscated. This is why it’s a more convenient way to pay for goods and services.”
Aaron Brown, a writer for Bloomberg Opinion, made an interesting remark regarding the rising popularity of stablecoins as a medium of payment saying that their users are not necessarily believers in the long-term value of crypto. They’re only concerned with the guarantee that the underlying currency will retain its value long enough to settle the transaction.
In similar news, BTCManager reported on January 16, 2020, how close to 36 percent of small businesses in the U.S. accept virtual currency payments.