Elon Musk’s SpaceX uses crypto stablecoins to fight against “foreign exchange risks”
Silicon Valley venture capitalist Chamath Palihapitiya disclosed that SpaceX’s subsidiary Starlink uses stablecoins to fight against the risks associated with the challenges of foreign money exchange.
Stablecoins are fiat-pegged tokens that were initially designed to help crypto traders move funds from one crypto exchange to another without any third-party restriction or direct involvement. The first stablecoin in the crypto sector was BitUSD, a crypto-backed stablecoin that was launched in 2014 but collapsed badly in 2018. Later, Bitcoin exchange Bitfinex’s sister firm Tether entered the crypto space with the stablecoin concept & launched USDT & now it is the king of the stablecoin industry. In the present time, the use of stablecoins is now visible among government authorities in some countries for payment purposes.
SpaceX uses Stablecoin
In the latest podcast, popular Silicon Valley venture capitalist Chamath Palihapitiya said that Elon Musk’s rocket company SpaceX collects Starlink, a satellite internet service provider company owned by SpaceX, customers’ payments from all countries and converts them into stablecoins.
Palihapitiya explained that SpaceX re-converts those stablecoins to US dollars.
Challenges with traditional banking payment
There is no doubt that the banking sector is evolving with time, on behalf of people’s demand, but this evolution is not at the pace it should be.
The latest report by the Wall Street Journal (WSJ) noted that nearly 75% of crypto hedge funds have been facing significant problems with basic banking services in the past three years.
Notably, a similar kind of thing came to light a few weeks ago, when some big crypto entrepreneurs claimed that they were debanked because of their involvement in cryptocurrencies.
Interestingly investors in areas such as real estate and private credit did not report similar problems.
This is a sign that the crypto & Blockchain sector is evolving rapidly & creating significant competition against the traditional banking sector, but now it is a time when banks should increase their inclination toward blockchain technology in collaboration with crypto companies.
Read also: Bitcoin crashes again below the $96k level, analyst says it was necessary for the $200k level
