The German software company SAP is testing cross-border payments using Circle’s USDC stablecoin to simplify international money transfers.
In a recent blog post, they announced this experiment, stating that the testing is being conducted on an Ethereum test network. SAP aims to address several issues related to cross-border payments through this testing.
These challenges include high transaction costs, which can reach $50 per transaction, and the long duration it takes to move money (up to 7 days). Lack of transparency regarding transaction status is another problem they hope to solve.
SAP provided a preview of their SAP Digital Currency Hub to showcase the potential of international payments using digital currency. They are utilizing the Ethereum network and Circle, the second-largest stablecoin in the market, and have invited individuals to sign up and test this payment method.
It’s important to note that participants won’t be able to make actual payments using USD Coin (USDC) as this is only an experiment. Instead, they will receive a certain amount of Bitcoin and an invoice, allowing them to experience what SAP envisions as dependable and cost-effective cross-border payments.
The test won’t involve real ERC-20 USDC tokens and will run on a different blockchain than Ethereum. Given that many renowned organizations rely on SAP’s services, adopting Ethereum-based coins would surge if there is significant customer demand.
This experiment aims to demonstrate the ease and practicality of conducting international transactions using USDC. In response to the announcement, some members of the Twitter community questioned why they chose USDC instead of USDT.
One possible explanation is that USD Coin (USDC) has become the most liquid stablecoin on centralized exchanges (CEXs), according to a recent report by Kaiko.
Impact on markets
The study shows significant bid volume of $38 million, which helps prevent a slight price deviation of the USDC asset. Regarding its market performance, USD Coin (USDC) is currently trading near the middle of its five-day price range, based on data from CoinMarketCap.
It is 0.09% below its all-time high and 0.10% above its all-time low, which was $0.999. Despite the positive news about large corporations adopting digital currencies, it’s worth noting that USD Coin has experienced a decline in trading volume recently.
Today’s volume is lower than the average volume of the past seven days, indicating reduced market activity related to the stablecoin.
