The rise of digital currency powered by blockchain technologies

With the decline in cash, digital currency is at a crossroads. Blockchains are increasing and digital payment methods are becoming the norm. Will blockchain technologies deliver on their promise to improve equity and access for all, build trust and foster innovation?

Once upon a time, the internet revolutionized the way we communicate. Today, technology is radically challenging the way money may work in the future. An extensive debate is currently taking place about the social and economic consequences of blockchains, stablecoins and digital currencies.

At Worldline, we believe that implemented responsibly, these can pave the way for a new era of payments, more efficient and more customer-centric.

Different blockchain technologies

As the name suggests, blockchain is a chain of blocks that contain information about transactions. Each block contains data in the form of coding. Essentially, a blockchain is a digital ledger of transactions that is duplicated and distributed across the network. The ways in which the blockchain is implemented can vary.

A blockchain can be public, where everyone is allowed to enter the network, participate in consensus and have an overview of all transactions. Or it can be private, where only accredited participants are allowed to be part of the network. Transactions and access are managed by a central authority.

To put it very simply, private blockchain is to the intranet what public blockchain is to the internet.

At Worldline, we leverage private blockchain technology for our Worldline Digital Currency solution as it increases efficiency (by handling thousands of transactions per second compared to 4 transactions per second with bitcoin), reduces the environmental footprint (by 99.99%), and creates a safe environment .

Stablecoin, the game changer for the payments industry

There are different forms of cryptocurrencies, each with a different modus operandi.

Stablecoin is a type of cryptocurrency that is linked to assets such as commodities (such as gold) or fiat money, thus ensuring that its value is stable. The common and easiest way to achieve this is to back up your stablecoin 1 to 1. This means that for EUR 1 worth of stablecoin, there is EUR 1 in a vault.

Stablecoin is an attractive and interesting alternative to fiat money as it retains its value but is operated digitally on a blockchain. Essentially, a stablecoin is a bridge between cryptocurrencies and fiat money.

How digital currencies are shaping the future of payment processing

Digital currencies are already here. According to recent studies, 87% of merchants in the United States consider accepting digital currencies a competitive advantage. In China, 187 million people pay with the digital yuan using their phone.

This is neither a surprise nor an epiphenomenon. Traditional payment methods all have their drawbacks. Either they are not convenient to carry or they run through dedicated schemes and usually come with hefty fees for the merchants.

Digital currencies, meanwhile, offer interesting benefits:

• Sellers can get around the schemes, reduce transaction costs and win new customers.

• Issuers can manage multiple assets simultaneously, as well as manage the acceptance network with a click.

• Consumers can have a completely transparent payment experience.

With traditional payment methods, onboarding can be a pain, and digital currencies are here to help. They do not require a payment terminal and merchants can simply subscribe to the issuer’s platform and start accepting payments.

Programmable money is another advantage of digital currencies. Since they are electronic, conditions can be easily entered. For example, issuers may set an expiration date or a provision that the money follows the rate of inflation to protect customers.

Rethinking and reshaping the fan journey at an international event

Imagine fans traveling to an international music festival or sporting event for which a specific digital currency has been created, tied to fiat currencies. By registering and downloading the dedicated application that issues and manages this digital currency, they will be able to attend the event in a relaxed and secure manner.

In fact, they will no longer need to exchange money or withdraw money. They will be able to pay for drinks, food and souvenirs using their smartphones, avoiding the risks of carrying cash and credit card fees while earning loyalty points. They want to avoid currency surcharges and want to protect their purchasing power, regardless of the status of their home currency. Partners and merchants will also enjoy the benefits of low transaction fees and instant settlement. Using a digital currency ensures a high degree of stability and protection for the fan community worldwide.

Of course, digital currencies are not limited to events. Whether you are a marketplace looking to create your own tokens, a bank looking to offer its own digital currency to its customers, or a public institution issuing coupons, you will find many benefits in embracing digital currencies.

These trends pave the way for digital currencies to become mainstream. The new breed of digital currencies have been hailed for their perceived advantages over any other currency or form of digital payment, on the grounds that they are safer to store, easier to manage, safer for consumers and faster to transfer.

At Worldline, we have supported several customers in creating their own blockchain and payment ecosystem. You will find more information here.

Synopsis:

What are the social and economic consequences of blockchain, stablecoin and digital currencies? Will they create a cashless society, improve equity and promote innovation? All the signs seem to be pointing in that direction. In addition to being an alternative store of wealth, they can also be used to, among other things, make low-cost money transfers and private transactions, boost the local economy and facilitate the organization of international events and travel. At Worldline, we believe that stablecoin’s many real-world use cases are why it is seen as the future of money.

About Thibault Pelé:

Thibault is an experienced product manager on blockchain and stablecoins at Worldline. Driven by innovation, he takes pride in working with go-to-market strategy and developing products that are about to change the way we live.

His previous experiences show his interest in finance and the digital industry, with many years of work in investment banking. In addition to his primary job functions, Thibault is committed to the Web3 ecosystem.

About Worldline

World line [Euronext: WLN] is a global leader in the payments industry and the preferred technology partner for merchants, banks and acquirers. Powered by 18,000 employees in 40 countries, Worldline offers its customers sustainable, reliable and innovative solutions that promote their growth. The services offered by Worldline include in-store and online commercial purchasing, highly secure payment transaction processing and a range of digital services. In 2021, Worldline generated a proforma revenue close to 4 billion euros.