Elon Musk’s company SpaceX employs stablecoins to avert currency risks, according to Chamath Palihapitiya, founder of Social Capital, during the All-In podcast.
Such risks can arise from sharp fluctuations in exchange rates. For instance, a US company with clients in Brazil paying in reals may incur losses when converting to dollars.
Palihapitiya stated that SpaceX accepts payments from Starlink users in low-income countries and converts them into stablecoins.
“When they [SpaceX] aggregate payments in developing countries, they do not want to take on the risks associated with currency exchange. They do not want to deal with international transfers,” the expert noted.
He added that stablecoins are poised to become the primary tool for cross-border payments. Thanks to them, the US can “get rid of all this outdated infrastructure that banks use to slow down and tax a process that should never have been started.”
In his view, issuers of “stable coins” like Circle and Tether compete not only with banks but also with payment giants such as MasterCard and American Express.
Palihapitiya noted that reducing the cost of cross-border payments by even 3% (the fee charged by companies like Stripe) would positively impact global GDP.
Aaron Levie, CEO of Box, agreed with the head of Social Capital. He said that replacing resource-intensive traditional intermediaries “definitely makes sense.”
Previously, Palihapitiya described Bitcoin as insurance against inflation.
Back in June, the venture investor predicted Bitcoin would reach $500,000.