SCOTTSDALE, Ariz.– Zelle has announced plans to allow users to start making international payments using stablecoins.
The move by Early Warning Services, which operates the P2P payments network Zelle and which is owned by a consortium of large banks, comes in the wake of the passage of the GENIUS Act, which is designed to usher stablecoins into the regulated financial system.
Stablecoins are a digital currency that is pegged to a fiat currency such as the U.S. dollar.
As the CU Daily reported here, credit unions were strongly urged during an event last week to not just start paying attention to stablecoins but to begin taking action as interchange income is threatened.
Similarly, analysts said the move by Zelle to help users move money across borders is a defensive move in response to what is expected to be the growing use of stablecoins by consumers and businesses.
Early Warning Services did not indicate how it would work or when it would launch, according to several sources. To date, Zelle has been limited to the U.S. Stablecoins are a digital currency that is pegged to a fiat currency such as the U.S. dollar.
‘Particularly Attractive’
As the Wall Street Journal noted, stablecoins are particularly attractive as a payments tool, and companies that include Walmart and Amazon have already announced plans to issue their own stablecoins in part to avoid the fees involved in payments networks. Several credit unions have also announced similar plans.
The move by Zelle is “intended to head off growing competition from the cryptocurrency industry,” the Journal reported.
The Journal analysis further added, “Cross-border payments is one area in which those in the cryptocurrency and traditional finance industries agree that stablecoins could be particularly useful.”
