Blockchain Payment Service BitPay Introduces Support for Three Stablecoins

Blockchain payment services provider BitPay has announced that it adding support for stablecoin payments for merchants and consumers.

According to a press release, Bitpay has confirmed the addition of three stablecoins to its list of supported tokens. The stablecoins include Circle’s USD coin (USDC), the Gemini dollar (GUSD) and Paxos Standard token (PAX), all pegged to the U.S. dollar.

Apart from the newest addition, BitPay also allows payments in Bitcoin (BTC), Bitcoin Cash (BCH) and Ethereum (ETH). The rollout brings the total number of available tokens up to six. Notably absent from BitPay’s list of supported tokens is Tether (USDT), the stablecoin with by far the biggest trading volumes.

Following the announcement, CEO Stephan Pair stated in the press release:

“Accepting or paying with stablecoins opens up new possibilities for global businesses that require the stability of the dollar but the security and efficiency of blockchain payments.”

The new service allows BitPay’s over 30,000 merchants, including Microsoft, to accept payments in the stablecoins. In addition to that, BitPay’s wallet users as well as its prepaid cardholders now have the opportunity to spend USDC, GUSD and PAX at all points of supporting merchants.

“Businesses can invoice international customers without the need for costly, complicated cross-border wire transfers. Customers can send and receive payments using fast, efficient, and volatility free dollar-pegged stablecoins,” added Pair.

Additionally, the wallet will provide a full stack of usual operations such as controlling, managing and storing the stablecoins’ private keys.

As for the company’s decision to support stablecoins, it claimed that three stablecoins had gained momentum in recent years. At the same time, stablecoins record their transactions on an immutable public ledger, therefore they work similarly to classic cryptocurrencies.

In the meantime, Gemini’s managing director of financial operations – Joshua Rawlins – asserted that pairing of crypto payment acceptance with a stablecoin like Gemini dollar, is powerful as it combines the creditworthiness and price stability of the U.S. dollar with blockchain technology.

Rawlins further stated that merchants benefit from faster, cheaper, and fraud-resistant payment settlement, whilst consumers benefit from the ease of using cryptocurrency without worrying about price fluctuations.

Meanwhile, since its launch in 2011, BitPay processed over $1 billion in payments last year from global merchants. The firm is backed by notable investors, having raised over $70 million in funding from Peter Thiel’s Founders Fund, Nimble Ventures, and Virgin Group, amongst others.

Bermuda – First Government to Accept USDC for Tax Payments

Bermuda has become the first government to accept the USDC stablecoin – a U.S. dollar-pegged stablecoin, managed by major players in the crypto market, Circle and Coinbase –   for tax payments, marking a milestone for cryptoasset adoption.

Global financial services company Circle published a report on Wednesday, confirming that the government of Bermuda will accept payments in USD Coin (USDC) “for taxes, fees and other government services.” The country will be supporting USDC as a method of tax payment for all its residents, which accounts for circa 65,000 people.

The latest development is a part of a broader initiative by Bermuda’s government, as stated by Circle, as its goal is to support the usage of USD-dollar backed stablecoins and decentralized finance protocols and services. The stablecoin launched a year ago by cryptocurrency exchange Coinbase and Circle. Up until now, over $1 billion worth of USDC has been issued between the two startups.

Circle co-founder and CEO Jeremy Allaire stated:

“Bermuda’s Premier made a broader announcement today about embracing stablecoins as the future of the financial system, with a focus on innovations in fintech that can deliver value not just for Bermudians, but also globally via company’s licensed under their Digital Asset Business Act.”

Allaire further explained that the country’s economy already relies on a United States dollar-backed currency, namely the Bermudian dollar. As such, he believes that “it’s natural that they would both embrace USD-backed stablecoins for their own government services.” He further added that Bermuda is currently focused on enabling financial services to be created and delivered using cryptocurrency and digital assets.

Allaire strongly believes that this new development reinforces the idea of global mainstream adoption of stablecoins for everyday payments and commerce.

Circle has also been granted awarded a “Class F” license under Bermuda’s Digital Assets Business Act (DABA) of 2018. According to the company, the DABA license makes the company the first major cryptocurrency exchange and wallet service ever to receive such a permit.

Allaire commented:

“Through the DABA, Bermuda is one of the first countries in the world to create a comprehensive regulatory framework for digital currency and digital asset-based products and services, including licensing of firms operating payment systems using stablecoins. It will be interesting to see how other governments will respond to this fundamental innovation.”

The Bermuda government launched a blockchain task force in partnership with the Bermuda Business Development Agency (BDA) in late 2017. It went on to pass legislation on initial coin offerings (ICOs) as well as establishing a regulatory sandbox for cryptocurrency companies.

Due to the favourable crypto conditions in the country, Circle has recently moved its exchange operations to Bermuda.

Following this news, it has also been reported that Bermuda will be partnering up with blockchain startup Shyft Network to launch a digital identity program, which will benefit business individuals, claimint that it will be easy to use and will provide better transparency and place the individuals in control of their identity-related data.

Coinbase Users Will Start Earning Interest on USDC Holdings

San Francisco-based cryptocurrency exchange Coinbase has announced that from now clients will be able to earn interest for holding the stablecoin USD Coin (USDC) in its crypto wallet. Coinbase users will receive a 1.25% on their USDC holdings per year.

The news had been shared through a blog post on the exchange’s website, stating that Coinbase will pay rewards on literally any amount of USDC held, which will be distributed each month automatically.

Users with at least one dollar’s worth of USDC in their accounts will automatically begin to accumulate rewards on their holdings, with no additional cost or fees. USDC is a stablecoin, whose value is pegged to the U.S. dollar at a 1:1 ratio. It was launched last year by CENTRE, a consortium co-founded by Coinbase and Circle.

Currently, the Coinbase Rewards is only available to eligible U.S. customers, however New York State based users will not have access to this reward system. Furthermore, it will only be available on Coinbase and not Coinbase Pro – Coinbase’s sister exchange for professional traders.

Coinbase product manager Paul Katsen has explained that the exchange is trying to build more ways for customers to grow their wealth on Coinbase.

He further added:

“One of the things we know is a bad customer experience is having to move your money back and forth from Coinbase to a bank account [to] earn a little bit of interest in the bank account. We’re trying to bring some of these experiences together but make them crypto-first and on Coinbase.”

According to Max Branzburg – director of product at Coinbase – the user experience is very simple and smooth. He explained that as soon as a client has USDC in their wallets, they can start earning rewards. All rewards earned on the exchange can be tracked in real-time and used immediately to buy other cryptocurrencies listed on the exchange.

He further stated that the reward system will be financed by the exchange itself, by using pre-existing revenue streams.

“We can pull from the profits we generate as a business to reward our customers for storing their assets on the platform,” Branzburg said, adding:

“We’re fortunate to be able to do that as a profitable business.”

This is an attractive proposal for anyone that trades on Coinbase, as it is more advantageous than moving fiat from a bank to Coinbase and vice versa. Indeed, at 1.25 percent, the interest rate offered by many federally-insured bank accounts trump that of Coinbase. Although it is still higher than the apparent U.S. national average of 0.9 percent, NerdWallet lists a total of 14 savings accounts that offer more than two percent APY.

Meanwhile, Coinbase’s news follows competitor Binance’s launch of a staking platform yesterday, which rewards users keeping coins, including Algorand’s Algo and Stellar’s XLM, on the exchange. Whilst this makes it much easier for users to grow their supply of stake-able coins, it does mean that the exchanges will have sizeable influence over such proof-of-stake blockchains, which is a worrying sign.