What's Happening?
TerraPay, a global money movement company, has partnered with Fipto to implement stablecoin-native flows, allowing clients to fund and pay out partners directly in stablecoins. This strategic shift follows a year of testing a 'stablecoin sandwich' approach, which involves converting fiat to stablecoins for cross-border transactions before converting back to local currency. The adoption of stablecoins is expected to reduce transit time, alleviate working capital pressure, and significantly decrease prefunding requirements across TerraPay's global payments network.
Why It's Important?
The move to stablecoin-native flows represents a significant evolution in cross-border payment strategies, offering enhanced speed and flexibility. By bypassing legacy banking hours and batch processing, TerraPay can provide 24/7 liquidity, which is crucial for global payment service providers. This development could lead to increased efficiency and reduced costs for businesses engaged in international transactions, potentially transforming the landscape of global payments.
What's Next?
As TerraPay continues to integrate stablecoin flows, the company is likely to expand its network of payout partners, further amplifying efficiency gains. The partnership with Fipto ensures compliance and security, paving the way for broader adoption of stablecoins in cross-border payments. This could encourage other payment service providers to explore similar strategies, driving innovation in the financial sector.
