Stablecoin-as-a-Service: The 21st Century Money Revolution

Traditional cryptocurrencies have a reputation of their value being too volatile, making them useful for speculation investment. However, this makes them unattractive for any other use case. This dilemma encouraged the creation of stablecoins, whose value is not so strongly influenced by buying and selling conditions.

With the recent announcements from various banks to Facebook and even Walmart, stablecoins have become quite an attractive concept to major corporations, leading to a need for stablecoin-as-a-service providers in the market, such as Stably. We are a fast growing FinTech startup from Seattle founded in April 2018 by a team of former bankers and Amazon software engineers. Stably and our regulated partner, Prime Trust, are the creator of USDS, the 7th largest US Dollar-backed stablecoin in the world featured on major crypto exchanges like Binance and Bittrex.

In a few months, Stably will launch one of the world’s largest gold-backed stablecoins in partnership with an enterprise client who is also going to be the first major client for our stablecoin-as-a-service business.

Why major companies want to have their own stablecoins

Social media giant Facebook announced in June the launch of its stablecoin “Libra”. It is easy to see why such a company would want to have its own digital coin. Facebook is one of the most influential companies in the world, and it has billions of users. The company revealed that Libra is aimed at making digital payments easy across the globe. In short, the social media giant wants to make sending money across the globe as easy as sending a text.

Companies such as Wells Fargo and even retail companies such as Walmart and Amazon could reap many benefits from the use of stablecoins. For example, a company may offer a stablecoin as a token on its platform, making it easier for the token to be adopted. Customers could use the token to purchase the company’s products from the website. The stablecoin would also make incentives on the platform easier. Companies could use these digital currencies to offer bonuses, discounts, and awards.

Essentially, companies could leverage stablecoins to provide an incentive to consumers to use it, contributing significantly towards building customer loyalty. The adoption of stablecoins by companies, especially in the retail sector, may go a long way in reducing the processing costs involved when using fiat currencies.

There are also other advantages to stablecoins, especially for customers. Stablecoins and digital tokens can grant users access to special features and perks. It is a similar principle to casino chips. As far as regulation and safe usage are concerned, the involvement of major companies is a good thing. Major firms have the power to steer regulation in the right direction. Their involvement could also encourage the masses also to embrace cryptocurrencies.

Facebook’s approach

It is no coincidence that Facebook and numerous other companies have expressed interest in stablecoins. Facebook’s particular use case makes a lot of sense, especially since the company already has platforms that reach billions of people. It was only a matter of time before they introduced a method of transacting on those platforms.

Wells Fargo’s approach

Wells Fargo’s venture into stablecoins is also fueled by the need to achieve faster and cheaper transactions. One of the company’s executives recently revealed that Wells Fargo’s cross-border transfer service leverages a stablecoin that is cheaper and faster than SWIFT, which is a global system used by financial institutions to facilitate transactions, especially across borders.

Walmart’s approach

Retail giant Walmart recently filed a cryptocurrency patent that would allow it to follow in Facebook’s footsteps. The patent filing revealed that Walmart wants to pursue a stablecoin pegged on fiat currency. The company’s goal with the cryptocurrency is to provide accessibility to those that do not access banking services.