The future of digital payments was a hot topic at the recent Blockchain Expert conference in Tel Aviv, where senior executives from the crypto and regulatory sectors gathered to discuss the changing landscape. Experts at the event were optimistic about the future, with many predicting that all payments worldwide will be instantaneous in just a few years.
One key trend highlighted at the conference was the increasing use of stablecoins in blockchain transfers. Idan Oferat, co-founder of Fireblocks, revealed that the majority of transactions processed by the company are in stablecoins such as USDT and USDC. In fact, Fireblocks has processed over $3 trillion in client transfers, with more than 50% of these transactions involving stablecoins. Oferat noted that approximately 10% of all stablecoin transactions originate from payment companies, indicating a growing trend in this area.
Bitcoin, once seen as a revolutionary tool for cross-border payments, has lost its edge in this domain according to payment industry expert Daal Shalev. While Bitcoin remains a store of value, its slow transaction times and high fees have led many to seek alternatives. Shalev also touched on the topic of central bank digital currencies (CBDCs), noting that the Bank of Israel has indicated it will not launch a CBDC until other nations do so first.
PayPal’s Head of Blockchain and Digital Currencies, Yonatan Yochpaz, introduced PYUSD, a stablecoin introduced by the company in 2023. Yochpaz described PYUSD as a “supercharged” dollar that offers instant transactions with no settlement waiting period and lower transfer fees. He emphasized that PYUSD is one of the few stablecoins backed 1:1 by dollars held in a trust account and guaranteed by the New York Department of Financial Services (NYDFS), making it a secure option for users.
Banks are facing challenges in the digital era, with many struggling to modernize their systems to meet the demands of customers for fast, cheap, and near-zero fee transactions. Shalev highlighted the significant challenges posed by regulations requiring banks to update their outdated infrastructure, noting that most bank software systems still rely on legacy frameworks. He also discussed the potential of CBDCs to revolutionize the monetary system, offering governments greater power and control over the issuance and distribution of money.
According to Shalev, cryptocurrency is a catalyst for payment innovations, driving competition and leading to advancements such as SWIFT’s introduction of a new messaging standard and the regulation of payment service providers. These developments, he believes, will ultimately benefit consumers by providing more efficient and secure payment options. Shalev emphasized the transformative impact of CBDCs, which have the potential to change the game entirely by introducing new features such as limited geographic use or expiration dates on money, giving governments unprecedented control over the monetary system.
