Why We Need Stablecoins

April 11, 2022 | 

Why We Need Stablecoins

CFX is a white-label payment system that online businesses are using to reduce costly occurrences of chargebacks and fraud. Powered by USDC on the Solana blockchain, CFX provides your customers with faster and cheaper online payments and transfers.

Stablecoins are digitally native versions of the national fiat currencies that the general public use for everyday expenditures. The primary need for stablecoins is derived from common issues faced by legacy financial payment rails that bog the system down and make fiat currency transfers inefficient and expensive. Wire transfers are one of the most commonly used methods to transfer fiat currencies both domestically and across borders. They can take anywhere from 24 to 48 hours to complete and have fees that range from $0 to $50 per transaction. This method of transfer may become obsolete through the advent of stablecoins which can be transferred in a few seconds with near-zero fees, depending on the blockchain they are sent on. Stablecoins also greatly increase the number of people you can do business with as they do not require one or both parties of the transaction to have a bank account. Stablecoins allow cryptocurrency users to remove volatility from their portfolios without having to transfer to a traditional currency like the United States dollar (USD), Euro (EUR), or Great British Pound (GBP). On the flip side, stablecoins can be beneficial to any business that accepts payments or deposits online via credit or debit card by removing third parties that introduce additional risks and costs to each transfer. The most popular stablecoins, Tether (USDT) and USD Coin (USDC) are pegged to the value of the United States dollar and can be used across several blockchain networks. These digital assets maintain a value equal to one dollar based on the reserves held by the organizations that support them. For instance, the circulating supply of USD Coin (USDC) is currently hovering around 51 billion. Each USD Coin is valued near one dollar because the issuing company, Circle, holds approximately $51 billion worth of assets to back each USDC token in circulation.

Stablecoins Are Improving Online Payments

In the last five years, stablecoins have achieved widespread global adoption and are well on their way toward flipping traditional payment rails such as credit and debit cards, ACH, and wire transfers. Little ambiguity exists as to why. Measured against these legacy payment systems, stablecoins come out ahead in every category including speed, cost, and acceptance rate of each transaction. As a business, your financial onboarding will improve once you begin to accept payments or deposits via stablecoins. You can say goodbye to procedural hassles like chargebacks, credit card fees, and onerous rolling reserve requirements. Many businesses have started to accept transactions in cryptocurrency over the past few years. One common pain point with popular digital assets like bitcoin and ethereum are the volatile nature of their price action across global markets. Stablecoins take the next step to eliminate the price risk a business would face by holding the bitcoin or ethereum they accept as payment. When you make a sale or accept a deposit in USDC, the value of your holdings will be static. Eliminating price volatility, along with added fees and the risk of chargebacks, gives your business the flexibility it needs to continue to grow in the new era of decentralized finance. Blockchains like Solana are further improving stablecoin’s journey to payment dominance by processing transactions faster than competing chains with significantly lower network fees.

What is Solana?

The Solana blockchain is best known for its impressive speed and throughput. The time it takes for transactions to be confirmed as well as the number of transactions that can be processed per second are currently leading the world of blockchain technology. Transactions made using the Solana blockchain are typically confirmed in just a few seconds. The blockchain itself can handle up to 65,000 transactions per second which is on par with the capabilities of major credit card processors such as Visa and Mastercard.

USD Coin (USDC) on Solana

As previously mentioned, stablecoins like USDC are built to operate across multiple blockchains to give the end-user the benefit of choosing which chain best suits their needs. With regards to payment processing, there is little doubt that Solana offers the best solution by confirming transactions instantly with near-zero fees. USDC transfers on Solana typically incur a network fee that is no higher than $0.00025 per transaction. With user-friendly Solana wallets like Phantom, breaking away from the clunky legacy payment system has never been easier. CFX is harnessing the advantages of USDC on the Solana blockchain to provide online businesses with a new and improved method of accepting payments or client deposits which incur drastically lowered costs and also reduce the risks of chargebacks. Why We Need Stablecoins

Win Back Your Margin with USDC on CFX

CFX is a white-label payments system that leverages the advantages of stablecoins to give your customers the cheapest, fastest, and most seamless method of making payments or depositing money onto your platform. After completing a quick and easy integration, the CFX payment bridge will help your business win back its margin by reducing the occurrence of chargebacks, eliminating superfluous payment processing fees, and reining in rolling reserve requirements. CFX features the best aspects of traditional payment service providers and eliminates added costs and risks. How does this work? With CFX integrated into your online business, customers will gain the ability to purchase USDC on Solana by using their credit or debit card, bank account, Apple Pay, and additional payment methods. Once the USDC purchase is completed, the digital assets are sent to a wallet over which you have full control. At that point, you can credit the customer’s balance with USD if they are making a deposit or proceed in providing them with a product or service if you are making a sale. To combat chargebacks and costly instances of fraud, customers using the CFX payment gateway on your platform will complete a one-time Know Your Customer (KYC) check. This one-time process can be completed in as little as five minutes.

Getting Started with CFX

The CFX white-label solution eliminates the unnecessary costs of risky credit card transactions by shifting the risk to a payment service provider. After a light integration requiring little to no development on your online platform, CFX can be up and running in as little as two weeks. Click below to schedule a meeting with a CFX representative to learn more.

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