This structure will eliminate the need for businesses to create cryptocurrency wallets, manage private keys, or hold stablecoins on their balance sheets. From the company’s perspective, the transaction will be settled in traditional currency, while the payer will be able to use stablecoins. Thus, the speed of blockchain-based payments will be combined with the accounting and consensus infrastructure of the classic banking system in a single transaction.
Coinbase plans to offer virtual accounts through its infrastructure model as a banking service. Users will be able to automatically convert their fiat currency into stablecoins in these accounts. The collaboration will initially launch in the US.
Companies say the service is particularly geared towards corporate clients operating in different countries who want to receive payments around the clock. While stablecoin transfers can be made outside of bank operating hours, regulatory checks, customer verification, and final banking settlement of the funds will remain part of the system.
The partnership doesn’t directly mean a new stablecoin will be launched. Citi and Coinbase are connecting payment channels that use existing stablecoins. The tokens to be used, fees, transaction limits, and all supported countries have not yet been announced.
*This is not investment advice.
Leave a Reply