Tether, Rain, MoneyGram add stablecoin services

• Key insights: Tether, Rain, and MoneyGram all make moves to expand their digital asset businesses.
• What’s at stake: Stablecoins and other digital assets are drawing a lot of attention from payment companies. 
• Forward look: Tether plans to expand its digital wallet in the coming months. 

Tether, the largest stablecoin issuer by volume, has launched a self-custodial digital wallet that allows users to hold Tether’s stablecoins, including U.S. dollar-denominated USDT, its U.S.-regulated, USD-denominated stablecoin USAT, and its gold-denominated stablecoin XAUT. 

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Tether.wallet, as it is called, was built on Tether’s open-source Wallet Development Kit and allows users to send the digital assets over a number of blockchains, including Ethereum, Polygon, Plasma, Arbitrum and Bitcoin, depending on the asset. Tether plans to add more blockchains to the wallet in the future. 

“With more than 570 million people already using Tether’s technology, the next step is making that digital infrastructure even more accessible and usable by the end users,” Tether CEO Paolo Ardoino said in a statement. “The objective is to remove the complexity that has prevented broader adoption while preserving the properties that make the digital assets technology valuable.” 

Tether says that it adds tens of millions of new wallets per quarter in both developing and emerging markets. But Tether has come under fire recently when Sen. Richard Blumenthal (D-Conn.) accused the company of being “a key money laundering tool for Islamic Revolutionary Guards Corps, sanctioned Iranian banks, and Iranian weapons manufacturers.” —Joey Pizzolato

Rain, crypto tech firm Lydian add card for crypto

Lydian, which sells infrastructure for digital assets, and cryptocurrency firm Rain have partnered to launch the Lydian Card, a co-branded Visa card. 

The card is available in physical and virtual form, and can be used at more than 150 million merchants across Visa’s network, according to a release. It supports more than 300 digital assets, which convert to traditional currency for use at the point of sale. 

Stablecoins and other digital assets are drawing a lot of attention from payment companies, but are rarely used for payments. Stablecoins account for about 0.02% of global payments volume, according to McKinsey. 

That has led crypto companies to make it easier to use digital assets to make payments in traditional currency through conversion, or “on-ramp and off-ramp.”  

“Tokenized money and digital assets hold huge potential, but mainstream adoption only happens if spending them in the real-world is actually easy to do. Historically, getting this right has been tricky and complex,” Farooq Malik, CEO and co-founder of Rain, said in a release. —John Adams  

EBANX expands into 4 APAC countries and Turkey

Cross-border payments fintech EBANX is expanding into five new countries, including Turkey, Vietnam, Thailand, Indonesia and Malaysia. 

The expansion supplements its services in India and the Philippines, and follows the opening of its Asian headquarters in Singapore in March. Services in Malaysia and Vietnam are expected to begin next quarter, and are already live in the other countries. 

“Asia is where the world’s fastest-growing consumer base is, and also where some of the most ambitious digital companies are headquartered,” said João Del Valle, co-founder and CEO of EBANX, in a statement. “Our investment in the region allows us to be closer to both. Global companies need local payment infrastructure to reach Asian consumers, and Asian companies need that same expertise to sell internationally. The opportunity runs in both directions.”

Digital wallets and account-to-account transfers account for more than 60% of ecommerce in Thailand and Indonesia, according to Payments and Commerce Market Intelligence.  —Joey Pizzolato

Chris Ratcliffe/Bloomberg

MoneyGram extends stablecoin balance to El Salvador

Cross-border remittance company MoneyGram is expanding its partnership with the Stellar Development Foundation to bring its stablecoin balance product to El Salvador. 

Stablecoin balance allows MoneyGram customers to receive funds into a U.S. dollar-denominated balance and cash those stablecoins out at a MoneyGram location. The service first went live in Columbia. 

MoneyGram said it plans to expand to other countries in Central and South America later this year. 

“Five years ago, MoneyGram and SDF made the bet that stablecoins could do more than move money between wallets,” MoneyGram Chairman and CEO Anthony Soohoo said in a statement. 

“We are building an open payments network that moves seamlessly across fiat and stablecoin, enabling faster, lower-cost transactions, starting with the people who need it most,” Soohoo said. 

MoneyGram also is working with payments fintech Nala to enable stablecoin settlement for payouts in Africa and Asia. Rival Western Union also is utilizing stablecoins for remittances. —Joey Pizzolato

Coinbase is bringing crypto-backed loans to the U.K.

Coinbase users in the U.K. are now able to borrow USDC using their Bitcoin or Ether as collateral. 

Coinbase’s lending product is powered by Morpho, an open network for on-chain finance that connects borrowers to lenders. 

The move is part of Coinbase’s effort to be an all-in-one finance app across the pond, and addresses the growing demand by crypto-native consumers for on-chain lending products.

On-chain lending works similarly to traditional lending. Borrowers are matched with lenders – typically institutional and retail on-chain users that want to lend against their crypto – and the borrower puts up their cryptocurrency as collateral to secure the loan, which is usually only a portion of the secured collateral to account for fluctuations in the digital currency. Loans are managed by smart contracts, and can be called if the pledged collateral falls below a certain threshold. 

Borrowers have to maintain an 86% loan-to-value ratio for the loans, and there’s no minimum limit, Coinbase UK CEO Keith Grose said on CNBC’s Squawk Box. The loans also do not have a fixed repayment period, meaning borrowers can keep the loan out for as long as their collateral meets Coinbase’s LTV requirement. 

Interest rates vary depending on demand on both sides of the market and the price of Bitcoin or Ethereum, depending on the collateral used. 

The launch in the U.K. comes on the heels of a similar launch in the U.S. 

“In the past 15 months, we’ve seen more than $2 billion in originations,” Grose said. “People are using this to put down a downpayment on a house, buy a car, or everyday spending against assets they want to hold for the long run. This is the type of experience that ultra-high net worth people have had for years with private bankers.” —Joey Pizzolato

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Ant measures ‘green impact’ for small businesses

Ant International, International Finance Corp and Filipino fintech GCash are working on a sustainability scorecard aimed at small businesses, which can use the service to track the environmental and social impact of business operations. “It provides visibility into their environmental and social impact and credibility that can attract green capital and partnerships,” said GCash Group Head for New Businesses Winsley Bangit in a release.

The scorecard will pilot launch in the Philippines with ecosystem assessments, measurements of stakeholder engagement and field testing. Following the pilot, the scorecard will launch in other parts of the Asia-Pacific region.

The firms hope to reach businesses that are required or aim to measure their transactions and supply chain management against local regulations. The move comes as some U.S. financial institutions walk back their climate-friendly strategies, while others rebrand their energy strategies to avoid political pressure. —John Adams

BVNK picks up business ahead of Mastercard acquisition

Business banking fintech Meow is collaborating with BVNK to support stablecoin and cryptocurrency payments for Meow’s clients. 

Meow sells financial services that power agentic commerce, as well as bitcoin on- and off-ramping, bill payment and corporate cards. BVNK adds a stablecoin option. 

“Businesses should not have to stitch together fragmented providers to collect funds, move money globally, and access modern payment rails. Our partnership with BVNK helps change that,” Brandon Arvanaghi, CEO of Meow, said in a release. 

BVNK, which was founded in 2021, specializes in technology that enables connections between traditional currency and digital currencies. Its technology covers blockchain networks in more than 130 countries.  

Mastercard recently agreed to acquire BVNK for $1.8 billion, with the deal expected to close before the end of the year. 

BVNK will embed its tools in Mastercard’s network, which covers more than 200 countries and includes established relationships with banks, payment processors, fintechs, acquirers and issuers. BVNK will enhance other recent Mastercard releases in digital assets, including the Mastercard Crypto Partner Program, a global initiative that includes more than 85 cryptocurrency companies, payment firms and financial institutions that will network and collaborate on digital asset technology. —John Adams  

Canadian stablecoin makes progress

B-to-B digital bank VersaBank has begun receiving deposits in the form of QCAD Canadian dollar stablecoins through a custody agreement with Stablecorp, the venture that’s issuing the Canadian stablecoin. QCAD has also been listed on the crypto exchange Kraken. The listing will enable QCAD to be traded on Kraken’s crypto asset trading platform, enabling settlement in Canadian dollars. Stablecorp is also the servicer of the QCAD Digital Trust, and counts Coinbase, Circle, DeFi Technologies and FTP Ventures among its investors. Developers in Canada have been working on stablecoins over the past year as the country’s banking industry attempts to counter the dominance of U.S. dollar-backed stablecoins.  

The London, Ontario-based VersaBank’s U.S. subsidiary also is testing USDVB, a U.S. dollar version of its digital deposit receipts, a form of tokenized deposits that are digital representations of deposits at the bank. —John Adams