German software giant SAP has recently revealed its plans to utilize the US Dollar Coin (USDC) for testing cross-border payments. This announcement is perceived as a “big deal” by Peter Schroeder, Circle’s integrated campaigns director. SAP, known as the largest non-American software company by revenue, believes that the complications faced by numerous small and mid-sized enterprises when sending funds overseas can be efficiently resolved with digital money and blockchain technology.
USDC serves as a stablecoin, a form of cryptocurrency that maintains a stable value by pegging it to a dependable asset, such as the U.S. dollar in this case. Customers can now opt to receive USDC running on Ethereum as “play money” for testing purposes as they explore this payment option. However, it is important to mention that the experiment will run on a distinct blockchain, separate from Ethereum, and will not involve genuine ERC-20 USDC tokens. Additionally, during this stage, customers will only be able to receive USDC and not make payments with the cryptocurrency.
If SAP clients exhibit a significant interest in adopting this form of payment, Ethereum-based cryptocurrency adoption could surge, as many large corporations depend on SAP’s services. In fact, Schroeder stated that “99/100 of the world’s largest companies” belong to SAP’s customer base.
The announcement explains how business partners would agree to settle a cross-border transaction with USDC or EUROC, tokenized versions of the USD or Euro, in lieu of depending on traditional payment methods. This innovative approach could showcase a glimpse into the thrilling world of digital money and decentralized finance (DeFi).
SAP’s experiment aims to enable customers to experience the speed, affordability, and reliability of cross-border payments backed by cryptocurrency. As the fifth-largest digital asset with a market capitalization of $28.3 billion, USDC has witnessed over $6 billion in transactions within the past 24 hours, according to CoinGecko.
Meanwhile, Circle, the fintech firm behind USDC, has been actively lobbying in Washington to encourage lawmakers to establish clear, straightforward regulations within the digital asset landscape. SAP’s recent announcement and its adoption of USDC for testing purposes could certainly influence decision-makers and promote a future where blockchain technology plays a pivotal role in cross-border transactions.
Source: Decrypt
