Stablecoins are making waves in the world of cross-border payments, offering a faster, cheaper alternative to traditional systems. Recent developments in the United States, the United Kingdom, and across Europe are signaling an exciting shift toward integrating stablecoins into the existing banking ecosystem. Having spent years immersed in entrepreneurship and financial technologies, I can’t help but see the immense opportunity here, and the challenges it brings.
The appeal of stablecoins lies in their ability to transact value instantly and at a fraction of the cost of traditional methods. For entrepreneurs and businesses, this is a game changer. Borderless commerce becomes smoother, and cumbersome intermediary processes can be bypassed. But that’s easier said than done. The success of stablecoins hinges on regulatory clarity, banking sector readiness, and widespread trust in the system. Here’s how the scene looks from where I sit:
1. Continued Lag in U.S. Regulation
The U.S. has yet to establish clear rules around stablecoins despite a growing number of issuers like USDC and PayPal’s PYUSD entering the picture. The GENIUS Act could finally bring those critical guidelines needed for mainstream adoption, yet the current situation creates uncertainty for businesses. Without definitive regulation, large institutions are hesitant to invest heavily in this new form of payment.
Still, forward-thinking companies are experimenting. Several U.S. banks are exploring stablecoin projects for private transactions. If you’re a U.S.-based entrepreneur looking to adopt stablecoin payments, the advice is simple: stay informed. Follow updates from the Federal Reserve’s stance on digital currency closely.
2. The U.K. as a Stablecoin Advocate
In the U.K., there’s more optimism. The Financial Conduct Authority (FCA) is actively working on crypto-friendly frameworks, and the Bank of England is making strides toward a potential digital pound. This moves the conversation forward, as regulators appear more open to the role of private stablecoins in revolutionizing the payment ecosystem.
If your business operates from or trades with the U.K., initiatives like the FCA’s regulatory sandbox foster a safer environment to trial innovative solutions. It’s a great testing ground if you’re planning to launch stablecoin-based services or explore new markets.
3. Europe’s Regulatory Progress Leads the Way
Europe is setting an example with clear governance through the Markets in Crypto-Assets (MiCA) legislation. This unified approach helps mitigate risk while encouraging adoption. A particularly promising use case emerges in high-cost corridors, like Europe-to-Southeast Asia, where stablecoins reduce fees and provide currency stability. For example, cross-border transactions using stablecoins in volatile economies like Argentina can cost up to 70% less compared to traditional banking.
If your business operates in Europe, take the time to understand MiCA. It’s a complex but promising development for trading partners looking to integrate stablecoins into their cross-border payment operations. Explore the MiCA Regulation Framework to familiarize yourself with the guidelines.
Curious How Stablecoins Work?
Stablecoins are digital assets pegged to a stable currency like the dollar (USDC or USDT) or even gold. Unlike Bitcoin, prone to volatile swings, they’re designed to retain a steady value. Transactions occur on blockchain technology, meaning currency exchange across different countries happens instantly without the need for intermediaries.
How to Start Using Stablecoins for Cross-Border Payments
- Research Options: Compare popular stablecoins, such as USDC or Ripple’s RLUSD, for compatibility with your business needs. They work best for payments as long as your trading partner is ready to accept them.
- Choose the Right Wallet: Use a secure, user-friendly digital wallet to manage your stablecoin holdings. Platforms such as Coinbase or Trust Wallet are great starting points.
- Regulatory Compliance: Stay within legal frameworks. In the U.S., for example, FINCEN compliance is critical. For Europe, MiCA is your guide.
- Test Small Transactions: Begin with smaller payments to ensure the process works and that your recipient confirms successful transfers.
- Set Up Cross-Border Vendor Agreements: Work with your suppliers or contractors to settle payments in stablecoins. Educating them on this process might be necessary.
Common Mistakes Entrepreneurs Should Avoid
- Ignoring Tax Implications: Cross-border stablecoin payments can still carry tax obligations. Check local laws where you’re operating.
- Choosing the Wrong Stablecoin: Not all stablecoins are created equal. Prioritize those that are regulated and well-trusted.
- Rushing Integration: Implement systems gradually. Otherwise, your operations might face hiccups.
- Ignoring Market Readiness: If the supply chains you rely on aren’t equipped for stablecoins, you’ll waste time and resources.
Stablecoins are not just a fintech trend, they signal a profound change in global commerce. For businesses, especially startups and SMEs working internationally, efficiency and speed are game-changers. Yet, adoption is not without hurdles. Regulation continues to evolve, and businesses must navigate carefully.
Here are a few valuable resources for those delving deeper:
- Bank of England’s digital pound initiative
- FCA’s regulatory sandbox for testing stablecoin projects
- European Central Bank’s digital euro developments
Being aware of these different efforts can give your business a strong advantage during this shift. For entrepreneurs, the message is simple: preparing for a stablecoin-driven payments future starts now. Don’t wait too long, your competitors are already testing it.
This is a moment where early understanding and smart action can make all the difference for your business. Let stablecoins work for you. Focus on being resourceful, staying compliant, and building trust among your partners. Who knows, you might find yourself leading innovation in this new world of faster, borderless payments.
FAQ
1. What are stablecoins and how do they work?
Stablecoins are digital assets pegged to stable assets like the US dollar or gold, ensuring minimal price volatility. They leverage blockchain technology for instant, borderless transactions without intermediaries. Explore what stablecoins are
2. How do stablecoins make cross-border payments more efficient?
Stablecoins reduce settlement times, transaction costs, and eliminate the need for intermediaries in cross-border payments, offering instant and transparent transfers. Understand stablecoin advantages
3. What is the regulatory status of stablecoins in the United States?
In the U.S., the GENIUS Act could provide regulatory clarity, but current regulations remain fragmented, discouraging full-scale adoption by banks. Learn more about stablecoin regulation in the U.S.
4. How is the United Kingdom integrating stablecoins into its financial system?
The U.K.'s Financial Conduct Authority (FCA) is creating crypto-friendly frameworks, and the Bank of England is researching a digital pound to enable stablecoin use in local and cross-border payments. Discover U.K. regulatory advancements
5. What is Europe’s approach to stablecoin regulation?
Europe has led the way with the comprehensive Markets in Crypto-Assets (MiCA) framework, which encourages stablecoin adoption while mitigating risks associated with cross-border payments. Explore MiCA’s role in stablecoins
6. Are central banks developing their own digital currencies as an alternative to stablecoins?
Yes, central banks in the U.K. and Europe are actively studying Central Bank Digital Currencies (CBDCs), like the digital pound and digital euro, as possible complements to private stablecoins. Learn about the digital pound initiative | Explore the digital euro
7. What are the common challenges in adopting stablecoins for payments?
Challenges include regulatory uncertainty, banking sector readiness, ensuring transaction security, and achieving interoperability across financial systems. Understand stablecoin adoption hurdles
8. Can stablecoins benefit businesses trading in volatile economies?
Yes, in unstable or high-cost corridors, such as Argentina or Southeast Asia, stablecoins can significantly lower transaction fees while offering currency stability. Read about stablecoin benefits in volatile economies
9. What precautions should businesses take when using stablecoins for payments?
Businesses should use regulated and trusted stablecoins, ensure compliance with tax regulations, and gradually implement stablecoin systems to avoid operational challenges. Check stablecoin best practices for businesses
10. Where can businesses experiment with stablecoin applications safely?
Programs like the FCA’s regulatory sandbox in the U.K. allow businesses to test stablecoin-based solutions in a controlled, risk-managed environment. Participate in the FCA regulatory sandbox
About the Author
Violetta Bonenkamp, also known as MeanCEO, is an experienced startup founder with an impressive educational background including an MBA and four other higher education degrees. She has over 20 years of work experience across multiple countries, including 5 years as a solopreneur and serial entrepreneur. Throughout her startup experience she has applied for multiple startup grants at the EU level, in the Netherlands and Malta, and her startups received quite a few of those. She’s been living, studying and working in many countries around the globe and her extensive multicultural experience has influenced her immensely.
Violetta Bonenkamp's expertise in CAD sector, IP protection and blockchain
Violetta Bonenkamp is recognized as a multidisciplinary expert with significant achievements in the CAD sector, intellectual property (IP) protection, and blockchain technology.
CAD Sector:
- Violetta is the CEO and co-founder of CADChain, a deep tech startup focused on developing IP management software specifically for CAD (Computer-Aided Design) data. CADChain addresses the lack of industry standards for CAD data protection and sharing, using innovative technology to secure and manage design data.
- She has led the company since its inception in 2018, overseeing R&D, PR, and business development, and driving the creation of products for platforms such as Autodesk Inventor, Blender, and SolidWorks.
- Her leadership has been instrumental in scaling CADChain from a small team to a significant player in the deeptech space, with a diverse, international team.
IP Protection:
- Violetta has built deep expertise in intellectual property, combining academic training with practical startup experience. She has taken specialized courses in IP from institutions like WIPO and the EU IPO.
- She is known for sharing actionable strategies for startup IP protection, leveraging both legal and technological approaches, and has published guides and content on this topic for the entrepreneurial community.
- Her work at CADChain directly addresses the need for robust IP protection in the engineering and design industries, integrating cybersecurity and compliance measures to safeguard digital assets.
Blockchain:
- Violetta’s entry into the blockchain sector began with the founding of CADChain, which uses blockchain as a core technology for securing and managing CAD data.
- She holds several certifications in blockchain and has participated in major hackathons and policy forums, such as the OECD Global Blockchain Policy Forum.
- Her expertise extends to applying blockchain for IP management, ensuring data integrity, traceability, and secure sharing in the CAD industry.
Violetta is a true multiple specialist who has built expertise in Linguistics, Education, Business Management, Blockchain, Entrepreneurship, Intellectual Property, Game Design, AI, SEO, Digital Marketing, cyber security and zero code automations. Her extensive educational journey includes a Master of Arts in Linguistics and Education, an Advanced Master in Linguistics from Belgium (2006-2007), an MBA from Blekinge Institute of Technology in Sweden (2006-2008), and an Erasmus Mundus joint program European Master of Higher Education from universities in Norway, Finland, and Portugal (2009).
She is the founder of Fe/male Switch, a startup game that encourages women to enter STEM fields, and also leads CADChain, and multiple other projects like the Directory of 1,000 Startup Cities with a proprietary MeanCEO Index that ranks cities for female entrepreneurs. Violetta created the "gamepreneurship" methodology, which forms the scientific basis of her startup game. She also builds a lot of SEO tools for startups. Her achievements include being named one of the top 100 women in Europe by EU Startups in 2022 and being nominated for Impact Person of the year at the Dutch Blockchain Week. She is an author with Sifted and a speaker at different Universities. Recently she published a book on Startup Idea Validation the right way: from zero to first customers and beyond, launched a Directory of 1,500+ websites for startups to list themselves in order to gain traction and build backlinks and is building MELA AI to help local restaurants in Malta get more visibility online.
For the past several years Violetta has been living between the Netherlands and Malta, while also regularly traveling to different destinations around the globe, usually due to her entrepreneurial activities. This has led her to start writing about different locations and amenities from the POV of an entrepreneur. Here’s her recent article about the best hotels in Italy to work from.
About the Publication
Fe/male Switch is an innovative startup platform designed to empower women entrepreneurs through an immersive, game-like experience. Founded in 2020 during the pandemic "without any funding and without any code," this non-profit initiative has evolved into a comprehensive educational tool for aspiring female entrepreneurs.The platform was co-founded by Violetta Shishkina-Bonenkamp, who serves as CEO and one of the lead authors of the Startup News branch.
Mission and Purpose
Fe/male Switch Foundation was created to address the gender gap in the tech and entrepreneurship space. The platform aims to skill-up future female tech leaders and empower them to create resilient and innovative tech startups through what they call "gamepreneurship". By putting players in a virtual startup village where they must survive and thrive, the startup game allows women to test their entrepreneurial abilities without financial risk.
Key Features
The platform offers a unique blend of news, resources,learning, networking, and practical application within a supportive, female-focused environment:
- Skill Lab: Micro-modules covering essential startup skills
- Virtual Startup Building: Create or join startups and tackle real-world challenges
- AI Co-founder (PlayPal): Guides users through the startup process
- SANDBOX: A testing environment for idea validation before launch
- Wellness Integration: Virtual activities to balance work and self-care
- Marketplace: Buy or sell expert sessions and tutorials
Impact and Growth
Since its inception, Fe/male Switch has shown impressive growth:
- 5,000+ female entrepreneurs in the community
- 100+ startup tools built
- 5,000+ pieces of articles and news written
- 1,000 unique business ideas for women created
Partnerships
Fe/male Switch has formed strategic partnerships to enhance its offerings. In January 2022, it teamed up with global website builder Tilda to provide free access to website building tools and mentorship services for Fe/male Switch participants.
Recognition
Fe/male Switch has received media attention for its innovative approach to closing the gender gap in tech entrepreneurship. The platform has been featured in various publications highlighting its unique "play to learn and earn" model.
