The core of stabilization currency payments is not to remove the bank completely from the payment process, but to transfer part of the value settlement to the block chain. According to the article, such payments are usually carried out in United States dollar-linked tokens, after a chain transfer is completed, and then converted by the paying agency or bank into the local currency required by the recipient.
The payment process is divided into three steps
A stable currency payment usually follows a path whereby the payer converts the French currency into a stable currency such as USDC, USDT, then transfers it to the recipient's wallet through a block-chain network, and then the local payer or cooperating agency completes the payment.
In the process, the block chain assumes the role of a clearing house and is responsible for recording the transfer of ownership of the currency; the amount of the difference between the French currency and the stable currency is usually still handled by banks, exchanges, issuers or payment platforms.
- French into stable currency
- Stabilize the money on the chain.
- Recipients converted to local currency
A chain settlement can run all day.
According to the article, the currency of stability can flow over the Etheleum, Solana and Polygon networks. Unlike many traditional payment systems, chain settlements can operate 24 hours a day, free of weekends and holidays.
After sending the transaction, the network certifier will confirm the transaction and update the book of accounts and then stabilize the transfer of currency control to the recipient. This step in the single-watch chain may take seconds to minutes to process.
However, the quick completion of a full payment remains dependent on compliance review, foreign exchange conversion and bank access. This means that the stabilization currency can reduce part of the friction, but it does not eliminate all the middle links.
More like a new payment channel than a substitute bank.
According to the article, a stable currency would be more appropriate to be understood as a new payment route than a substitute for the banking system. It has changed the place where the value settlement takes place so that “currencyization in United States dollars” can continue to flow along the chain, while trusteeship, compliance and local currency exchange remain primarily the responsibility of financial institutions and financial science and technology companies.
This model has been adopted by some large institutions. The article mentions that the stable currency clearing infrastructure in Visa has supported multiple block chains and is expanding the use of chain settlements.
This structure is also easier to land in cross-border payment scenarios. For example, an enterprise may convert the United States dollar into USDC, send it to a pay-off service provider abroad, exchange it into local currency and deliver it to the recipient. The article also mentions that Ripple ' s cooperation with Confera has followed a similar path, whereby the French currency enters from one end, stabilizes the currency to cover part of the settlement and is delivered by the other.
Existing products such as bank cards can be embedded
Stable currency payments are not necessarily directly exposed to commercial or end-users. The article points out that a stable currency-linked bank card is an example: a user can pay with an encrypted asset, but a business still receives a French currency.
This means that chain settlements can be embedded in existing payment products without changing the collection experience of the business. For the payment industry, the main change brought about by the stabilization currency was the renewal of the back-office settlement, not the complete re-engineering of the front-end payment habits.