ACH, Wire, and Soon Stablecoin Transfers?

“Many of the users out there today are not aware of stablecoins, or not interested in stablecoins, and they should not be,” said Jose Fernandez da Ponte, PayPal’s SVP of blockchain, crypto and digital currencies to CNBC. “It should just be a way in which you move value, and in many cases, is going to be an infrastructure layer.”

Stablecoins, blockchain-based units typically pegged to the US Dollar, are taking off. According to Visa, for example, $3.7 trillion worth of stablecoins were transacted in the last 30 days alone. Since there’s no speculation angle to be gained from holding them, the value of using stablecoins versus other methods of payments is primarily speed and cost. As an infrastructure layer, traditional lenders may want to keep an eye on developments there. For example, where ACHs may become too costly or impossible to utilize efficiently, USD-> Stablecoins-> USD could become a viable mechanism to sweep funds from a traditional bank account to a third party. Borrowers may not ever even need to know or be aware that blockchain rails are being used to transmit payments. Lenders too need not be burdened by crypto and instead merely leave the conversion of one to the other and back to a payment service.

This is not the domain of edgy upstart fintechs any longer either. According to American Banker, “The progress of the GENIUS Act has spurred banks to forge stablecoin strategies, with Citigroup, Bank of America and dozens of others considering launching their own stablecoin, joining a stablecoin consortium or both.” Additionally, stablecoin issuer Circle just applied for a national bank charter.

While much of the early blockchain utopian ideals speculated that commerce may be transacted with bitcoin, using the rails to transact in dollars may be a much more near-term and universally accepted method.