Uber Technologies, the tech firm best known for its ride-hailing service Uber, is considering using stablecoins as a potential solution for transferring money across borders more efficiently.
Uber is Studying the Potential of Stablecoins for Low-Cost, Cross-Border Transactions
Speaking at the Bloomberg Tech conference in San Francisco on June 5, Uber CEO Dara Khosrowshahi stated that the company is actively exploring the use case of digital assets typically pegged to fiat currencies, such as the US dollar. He emphasized the practical benefits of stablecoins, stating they are promising for “global companies” like Uber as they could help lower the cost of transferring funds internationally.
Khosrowshahi called the prospect “super interesting” but noted that the Silicon Valley tech conglomerate, which includes food delivery (Uber Eats), freight transportation (Uber Freight), and other logistics and mobility solutions, is still in the early stages of research.
Traditional cross-border payment rails can take between five to seven business days to be processed and involve a chain of correspondent banks, each taking a share of the amount as a fee. Whereas, stablecoins enable money to be moved peer-to-peer at internet speeds, without intermediaries. By transitioning to stablecoins, Uber can eliminate the charges associated with wire transfers and other traditional payment methods, bringing down settlement fees from $30 to below a dollar.
The Uber CEO also touched upon Bitcoin (BTC), referring to the apex cryptocurrency as a “proven commodity”. The company is yet to make any formal announcements about accepting crypto, but Khosrowshahi’s comments show that it is prepared to adopt the practicality of the financial technology’s use case.
His statements also reflect growing interest in blockchain-based payment rails among multinational corporations, which are looking to streamline their global operations and reduce financial friction.
Favorable Regulatory Environment is Pushing Fintechs and Banks to Adopt Stablecoins
It was reported in March that leading banks and Fintechs are exploring stablecoin’s cross-border capabilities, with plans to roll out their own fiat-backed tokens. Bank of America has joined the likes of PayPal, Stripe, and Revolut to announce that it is launching a bespoke fiat-backed cryptocurrency.
Recently, sources inside Meta revealed that the company is in discussions with various crypto firms to introduce stablecoins as a means to manage payouts. The social media and tech giant that operates Facebook, Instagram, Threads, WhatsApp, and Oculus has also hired a new vice president of product with crypto credentials.
Like Uber, Mark Zuckerberg’s Meta is reportedly working on a technology that would allow creators and influencers across different regions to be paid in stablecoins instead of wire transfers. The anonymous sources added that the company is taking an agnostic approach toward the type of stablecoin it will support, rather than choosing one provider.
Analysts noted that growing interest toward stablecoins from US corporations can be linked to lawmakers currently discussing legislation, such as the GENIUS Act, aimed at regulating digital assets that are widely used to transfer value between two different cryptocurrencies.
Stablecoins are becoming an increasingly popular alternative to local banks and payment rails in emerging markets. Moreover, they provide users with all the benefits of cryptocurrency, such as fast, cheap, and borderless transactions, without the volatility.
Also Read: SEC Wins $1.1M Judgment Against Keith Crews, an Alleged Crypto Scammer
Circle Launches Cross-Border Stablecoin Network Tailored for Financial Institutions
Last month, stablecoin issuer Circle announced the launch of the Circle Payments Network (CPN), the company’s own stablecoin-powered cross-border payments protocol. CPN is designed to connect banks, neo-banks, payment service providers, virtual asset service providers, and digital wallets, and allow them to settle international payments in real-time using the company’s regulated stablecoins like USDC and EURC.
Circle claims CPN is chain-agnostic and built with multichain flexibility, enabling its institutional clients to choose their preferred blockchains to operate on based on criteria like internal risk, compliance, operations, and security. It is currently live on Ethereum, Solana, and all EVM-compatible networks.
Fintech firms and banks are taking a varied approach to stablecoins. The former group, unburdened by traditional banking charters, is utilizing its regulatory flexibility to adopt new payment technologies demanded by customers. Meanwhile, the latter, which are bound to comply with financial regulations, are treading more cautiously.
