Blockchain for Banking News

Stripe CEO: compliant stablecoins reduce KYC, AML payment frictions


Stripe’s CEO Patrick Collison believes the major benefits of stablecoins and central bank digital currencies (CBDCs) will be seen in international payments. He gave the example of the ability to standardize KYC and anti-money laundering procedures (AML) during a discussion with Mark Carney at an Institute of International Finance event.

Real-time payments have been available in the UK for years, SEPA Instant payments are now rolling out in Europe, and Fed Now is expected to launch in the United States next year. Collison observed that making clearing houses faster may not be sexy compared to blockchain and CBDCs, but it reduces costs. Combined with open banking this enables innovation.

Hence in looking to a future where payments are already real-time, CBDCs and stablecoins might not have such an impact on the speed front. He believes the benefits will be seen further afield.

In April, we reported that Twitter creators could receive payment from followers in USDC stablecoins via Stripe. These relate to Ticketed Spaces and Super Follows.

“In the ordinary course of things, this is the kind of product that would be made available again to Twitter users in North America and Western Europe. That’s where, on an average revenue basis, those are the most lucrative opportunities. Those are the markets that are best understood,” said Collison.

“But that doesn’t make any sense when you think about it. Like, why should a Twitter user in Brazil not be able to have a premium account? Why should a Twitter user in Pakistan not be able to have a premium account? Why should a Twitter user in Namibia not be able to have a premium account?”

“And so the way we built it with Twitter was they’re using stablecoins, USDC, to make it possible to pay out to any country in which one can pass basic KYC, AML, counter-terrorism, etcetera. So the verification is uniform across the markets, where normally you’d be inhibited by heterogeneous rails. You can now be much more broadly enfranchising.”

Meanwhile, Stripe was one of the original members of the Facebook-founded Libra initiative. But it withdrew along with Visa, Mastercard and PayPal after regulatory pressure. That pressure ultimately shuttered the re-branded Diem project.

This March, Stripe launched payment services for crypto businesses enabling them to accept fiat deposits and payout in local currencies.

Image Copyright: unitysphere / 123rf