Stablecoins are becoming increasingly popular worldwide. They are a kind of cryptocurrency designed to minimize the price volatility typically associated with most cryptocurrencies. They are pegged to a stable asset such as a fiat currency or a commodity like gold.
There are 4 types of stablecoins; fiat-backed stablecoins e.g. Tether (USDT), crypto-backed stablecoins e.g. DAI, commodity-backed stablecoins e.g. Tether Gold (XAUT), and algorithmic stablecoins e.g. FRAX.
USDT is the most popular and widely used stablecoin, with a market cap of 110.79 billion USD!
Africa has seen massive growth in crypto adoption in recent years. Stablecoins in particular have been a catalyst for financial innovation and a solution for cross-border payments.
We highlight some use cases for stablecoins for global businesses operating in Africa…
- Remittances & Cross-Border Payments: Stablecoins facilitate cheaper and faster remittances and cross-border payments, especially when compared to traditional banks. It has become a preferred option as it benefits both sender and receiver.
- E-commerce & International Trade: Stablecoins have become an option for payments for both large and small e-commerce businesses, providing a secure and fast way for customers to pay for goods and services from anywhere in the world. Import-Export businesses are also increasingly adopting stablecoins to facilitate payments and settlements internationally.
- Tokenization of Assets: Stablecoins provide a stable value reference in the process of tokenization, which is the representation of real-world assets on the blockchain.
At Quidax, we support a number of industries and sectors. Are you a global company operating in Africa in any of the spaces listed/pictured below? Are you looking for a reliable, compliant payment partner to do business with?
Reach out to us by clicking here.
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