By
Bhushan Akolkar
April 26th, 2024
Customers will receive a designated amount of USDC along with an invoice, enabling them to experience the benefits of fast, affordable, and reliable cross-border payments.
In a significant move towards revolutionizing cross-border payments, German software giant SAP SE (ETR: SAP) has made an exciting announcement in this sphere. In a blog post, the company revealed its collaboration with Circle, a leading digital currency firm, to test the use of its stablecoin, USD Coin (USDC) as a means of facilitating international transactions.
For businesses engaged in international trade, cross-border payments have long been plagued by a range of issues. Cumbersome procedures, high fees, delays, and currency conversion complexities have created significant challenges that hinder smooth financial transactions. SAP, being a leader in enterprise software solutions, recognizes the importance of addressing these issues and is actively working towards finding innovative solutions.
In a bid to empower its clients and facilitate seamless cross-border payments, SAP has introduced a unique approach. The company is leveraging a “play money” version of Circle’s USDC, allowing clients to test the efficacy of sending money overseas.
As revealed by the company, customers can now receive USDC, which runs on Ethereum, as “play money” to test out the payment option. The test will take place on a different blockchain, not Ethereum, and will not use genuine ERC-20 USDC tokens.
By offering this test phase, SAP aims to gauge customer interest and gather valuable feedback on the usability and functionality of receiving USDC as a payment method. This experimental approach provides clients with a risk-free environment to explore the potential benefits and challenges associated with Ethereum-based cryptocurrencies.
If SAP clients show interest in adopting USDC, it could potentially result in a significant surge in crypto adoption within the Ethereum ecosystem. Notably, SAP’s broad customer base, which includes many major corporations, holds the potential to drive substantial traction for digital currencies on the Ethereum platform.
It is important to note that the experiment will not allow customers to use USDC for making actual payments. Instead, customers will receive a designated amount of USDC along with an invoice, enabling them to experience the benefits of fast, affordable, and reliable cross-border payments.
Why Is USDC a Suitable Option for SAP?
USDC’s impressive market position as the fifth largest digital asset, with a substantial market capitalization of $28.4 billion, underscores its significance and widespread adoption within the cryptocurrency market. The high trading volume of over $4 billion in USDC within 24 hours, as per by CoinGecko, further exemplifies its liquidity and active market participation.
Notably, USDC’s popularity can be ascribed to several characteristics, including trust and stability, widespread acceptance, and use case variety. As a stablecoin pegged to the US dollar, USDC provides users with a reliable digital currency option.
This stability reduces the volatility associated with other cryptocurrencies and enhances trust among investors and market participants. Also, its widespread availability makes it easily accessible to users looking for a stable and reliable digital asset.