SpaceX is using stablecoin to process payments from Starlink customers in small-scale transaction countries to minimize exchange rate risk and transaction costs.
Venture capitalist Chamath Palihapitiya revealed in the All-In podcast on December 20 that SpaceX, the aerospace company led by Elon Musk, is leveraging stablecoin to optimize the international payment process for its Starlink satellite internet service.
According to Palihapitiya, SpaceX collects payments from Starlink customers in low-volume transaction countries, then converts them into stablecoin and finally exchanges them for USD in the US. This solution helps SpaceX avoid exchange rate risks when converting currencies from various countries while minimizing costs and the complexity of international bank transfer transactions.
Starlink, a wholly-owned subsidiary of SpaceX, provides satellite internet services with global coverage. Serving customers in many countries with different currencies poses significant challenges in managing exchange rate risk and transaction costs.
According to Palihapitiya, using stablecoin allows SpaceX to aggregate payments from these countries without facing exchange rate risk and without having to process complex bank transfer transactions.
Vision of stablecoin in cross-border payments
Palihapitiya believes that stablecoin has the potential to become the dominant cross-border transaction method, replacing the outdated infrastructure systems that banks use to slow down and tax transactions that should not be taxed.
He believes that stablecoin providers like Tether and Circle are directly competing not only with traditional banks but also with large payment corporations like MasterCard and American Express.
Reducing cross-border transaction costs, such as lowering to 3% – the fee that Stripe is applying – could have a significantly positive impact on global GDP, according to Palihapitiya. This view is supported by Aaron Levie, CEO of cloud computing company Box. Levie believes that replacing expensive traditional transaction methods with stablecoin is very reasonable.
SpaceX's adoption of stablecoin is not surprising, especially since Elon Musk, the company's CEO, is a proponent of cryptocurrency. Tesla, another company of Musk, has previously invested heavily in Bitcoin and made over $1 billion in profit last month due to the appreciation of this currency.
Recently, after rebranding Twitter to X, Musk allowed users to send Bitcoin and other cryptocurrencies as rewards. This move, along with rumors of integrating cryptocurrency payment features on the X platform, reflects Musk's vision of applying blockchain technology in payments.