Businesses using the service never touch cryptocurrency, the company says, but their suppliers abroad get paid faster.
Oneremit, a cross-border payments company based in Lagos, Nigeria, says it is using stablecoin settlement to help Nigerian businesses pay foreign suppliers faster, through a partnership with NASDAQ-listed blockchain infrastructure firm, Owlting Group.
The arrangement runs on OwlPay, Owlting’s payment platform, starting with the Nigeria-China trade corridor. China is Nigeria’s largest source of imports, and many suppliers will not release goods until payment has arrived.
Stablecoins are digital tokens designed to hold a fixed value, usually one US dollar each. The best known, USDT and USDC, are backed by reserves, and unlike Bitcoin, their prices are not meant to rise or fall.
Oneremit said its business customers do not buy, hold or trade them. An importer pays as usual. The stablecoin is used only to carry the value across the border, and the supplier receives local currency at the other end.
The aim, the company said, is to cut the days that international transfers typically spend passing through intermediary banks, time in which businesses cannot use the money and exchange rates can move against them.
For many Nigerians, the word stablecoin still sits close to the crypto market and its well-publicised losses. Oneremit said the distinction it draws is between trading and settlement.
“When customers hear ‘stablecoin’, they understandably think of crypto trading, but what we do is very different. The stablecoin is simply how value moves between countries. Our customers pay in regular currency, their beneficiaries receive the currency they need, and no one holds crypto along the way. Every payment is handled through licensed, regulated channels at both ends and goes through the same anti-money laundering, fraud and sanctions checks as every other transfer we process,” said Oluwaseun Omotoso, Risk & Compliance Officer at Oneremit.
Both sides of the partnership are regulated. Owlting holds money transmitter licences in more than 40 US states, a Virtual Asset Service Provider licence in the European Union and an electronic payment licence in Japan. Oneremit holds an International Money Transfer Operator (IMTO) licence in Nigeria, FINTRAC and Retail Payment Activities Act registrations in Canada, and Money Services Business registration with FinCEN in the United States, with expansion underway in the United Kingdom and Ghana.
The China corridor is the first to run on the new stablecoin rails. Oneremit, which serves businesses trading across Africa and beyond, says it settles payments to more than 100 countries through local payment networks in markets including the United States, Canada and Europe.
