Silicon Valley venture capitalist Chamath Palihapitiya said on Friday's All In podcast that SpaceX is using stablecoins to hedge against currency risk.
Currency risk refers to the risk of incurring losses due to rapid currency fluctuations. For example, if a U.S. company has customers in Brazil that pay in Brazilian reals (BRL), the company may incur losses when converting to U.S. dollars.
Using stablecoins as a hedge
Palihapitiya said SpaceX collects payments from all Starlink customers in “long-tail countries” and converts them into stablecoins. Starlink is wholly owned by Elon Musk's SpaceX and provides satellite internet services.
Palihapitiya said the company is reconverting stablecoins into dollars in the United States.
“They (SpaceX) don't necessarily want to take on currency risk when aggregating payments to all these long-tail countries. They don't want to deal with sending wires.”
Palihapitiya said stablecoins are supposed to become the primary vehicle for cross-border transactions in the U.S., and that they are being used by “banks to slow down or tax processes they shouldn't have.” “We can scrape out all the aging infrastructure.” Taxed. ”
Stablecoin providers competing with traditional financial institutions
Stablecoin providers such as Tether and Circle have emerged as strong candidates to give banks a competitive edge when it comes to fund storage and transfer services.
But banks are not the only ones that stablecoin providers are competing with. Palihapitiya said stablecoin providers also compete with traditional payment giants such as Mastercard and American Express.
He added that reducing the cross-border remittance costs charged by Stripe by even 3% “would be a boon to global GDP.”
Aaron Levy, CEO of enterprise cloud company Box, agreed with Palihapitiya, saying stablecoins “make perfect sense” as an alternative to expensive traditional transaction mediums.
SpaceX is run by Elon Musk, who is a fan of the memecoin DOGE, so it's no surprise that the company uses stablecoins. Elon Musk's Tesla invested heavily in Bitcoin, but the value of the investment exceeded $1 billion last month, as the price of Bitcoin (BTC) began to soar after Donald Trump's election victory, making it clear that The investment yielded results.
Since taking over Twitter and rebranding the social media platform as X, Musk has allowed X users to send Bitcoin and other cryptocurrencies as “tips” to other users. There is also a lot of speculation about the role of cryptocurrencies in X's future payment functions.
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