Tether has introduced a new payment option for residents of the Philippines, allowing them to pay their social security system (SSS) contributions using its stablecoin, USDT.

Social Security System (SSS) in the Philippines

The SSS is a state-run social insurance program providing support to employees in both formal and informal sectors. It aims to offer financial assistance during challenging times and administers two key programs: the social security program and the employees’ compensation program.

Tether Partners with Uquid

Tether has partnered with Uquid, a leading Web3 shopping and infrastructure firm, to facilitate USDT payments for SSS contributions on the TON blockchain. Uquid is known for its decentralized commerce infrastructure platform that leverages blockchain technology and decentralized finance to offer crypto payment options. With a user base of over 260 million across various markets, Uquid is well-positioned to support the adoption of cryptocurrencies in daily transactions.

Growing Demand for Stablecoins

Stablecoins have seen increased demand in recent years, reflecting broader cryptocurrency adoption. They have played a crucial role in driving mainstream acceptance, initially serving as an on-ramp tool for centralized exchanges and now becoming vital liquidity providers in both centralized and decentralized markets. Advocates argue that stablecoins' near-instantaneous transactions and low costs make them ideal for disrupting the payments sector.

Stablecoin Integration in Payment Systems

PayPal introduced its PYUSD stablecoin last year to facilitate instant and lower-cost transfers within its payment infrastructure. Similarly, Stripe announced on April 25 that it would allow merchants using its platform to accept stablecoins for online transactions, starting with USDC on the Solana, Ethereum, and Polygon blockchains. Additionally, stablecoins are gaining traction for cross-border payments at the institutional level, highlighting their potential to revolutionize traditional financial systems. Recently, PayPal announced a feature allowing users to convert PYUSD stablecoin in their linked PayPal accounts to USD and use it as a funding source to send money to recipients in 160 countries globally.

Changes in Stablecoin Holdings

Despite the growing adoption of stablecoins, holdings among institutional and retail investors have decreased from 50.2% in December to 42.8% in May. Bitcoin remains the largest single asset held, accounting for 26% of their total assets as of May 2024. Retail traders and institutions alike continue to prefer BTC over ETH, despite renewed optimism for ETH Spot ETFs. Institutional positions in BTC and ETH are more concentrated compared to those of retail traders, with holdings of 39.4% and 20.9%, respectively, as of May. Following the SEC’s approval of Bitcoin Spot ETFs in January 2024, institutional Bitcoin holdings have consistently increased, while Ether positions have surprisingly decreased, suggesting a preference for Bitcoin due to concerns about Ether Spot ETFs not including staking rewards. In contrast, retail traders have demonstrated their ability to time the market effectively during the March-April 2024 correction.

Conclusion

The partnership between Tether and Uquid to enable USDT payments for SSS contributions in the Philippines marks a significant step towards integrating stablecoins into everyday transactions. As stablecoins continue to gain acceptance, they have the potential to transform traditional payment systems, offering faster and cheaper alternatives for cross-border transactions and everyday use. However, the shifting preferences and holdings among institutional and retail investors indicate an evolving landscape in the cryptocurrency market.

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