Checkout.com jumps into the crypto with the stablecoin payment feature

AMSTERDAM – The online payment company Checkout.com says it will settle payments for its sellers around the clock using stack coins, making it the latest major financial services company to step into crypto.

The startup, which competes with the likes of PayPal and Stripe, said Tuesday that it is launching a feature that allows companies to accept and make payments in USD Coin, a popular stack coin linked to the US dollar. Checkout.com said they are offering the new payment method through a partnership with Fireblocks, a crypto security firm.

Stablecoins are a key part of the crypto market, helping investors trade in and out of digital currencies quickly without having to go through banks. With a circulating supply of more than $ 50 billion, the USDC is the world’s second largest stable currency.

The feature will allow sellers to settle payments even on weekends and holidays, which is not currently possible with fiat currencies, according to Jess Houlgrave, Checkout.com’s head of crypto strategy. She used the example of someone who bought bitcoin from a cryptocurrency exchange. While the user can get bitcoin right away, the way banks and card schemes like Visa and Mastercard work means that sellers may not receive the money in several days.

“Between the time they send the bitcoin and the time they receive these funds, they have a working capital limitation,” Houlgrave told CNBC on the sidelines of the Money 20/20 fintech conference in Amsterdam.

Checkout.com said they have tested the feature privately with select customers, and have facilitated $ 300 million in transaction volume in recent months. It now plans to roll out the product globally, with the Bahamas-based cryptocurrency exchange FTX among the first to use it.

Last valued at $ 40 billion, Checkout.com is the latest major financial institution to invest heavily in crypto. Stripe recently launched its own stablecoin payment feature, which allows Twitter creators to get paid in USDC.

Such a development comes at a time when cryptocurrencies have fallen sharply from the top of a seismic rally last year. Bitcoin has more than halved in value since an all-time high of almost $ 70,000 in November.

Unlike bitcoin, stack coins are not meant to fluctuate that much in price. They are designed to be linked to the value of traditional assets such as the dollar. But recent events have put stablecoins’ main selling point to the test.

Last month, a so-called stable coin called terraUSD imploded after falling below the intended dollar stick, which shook investors’ confidence in cryptocurrencies. TerraUSD, or UST, used the code to maintain a price of $ 1. This is different from more common stack coins such as tether and USDC, which are backed by cash and other assets.

Meanwhile, Tether also fell just under a dollar on a number of exchanges as crypto investors fled the token due to panic over the UST debacle. Tether, which has long faced questions about support for stablecoin, said it processed more than $ 10 billion in redemption requests in May.

Regulators are beginning to worry about the phenomenon. Last week, the British government announced new proposals that will give the Bank of England the power to intervene and deal with the collapse of certain stack coins if they pose a risk to financial stability. Treasury Secretary Janet Yellen also wants U.S. lawmakers to approve stable coin regulation by the end of the year.