Tether recently announced a new payment option for Filipino citizens, allowing them to pay contributions to the Social Security System (SSS) using its stablecoin, USDT. This innovation was made possible through a partnership with Uquid, a renowned Web3 infrastructure company.
The social security system of the Philippines
The SSS is a state-run social insurance programme that offers financial support to workers in the formal and informal sectors. As a mandatory programme, the SSS aims to provide financial assistance in difficult times by administering two main programmes: the social security programme and the employee compensation programme.
The partnership between Tether and Uquid
Tether has partnered with Uquid to facilitate USDT payments for SSS contributions on the TON blockchain. Uquid is known for its decentralised trading infrastructure platform, which uses blockchain technology and decentralised finance (DeFi) to offer cryptocurrency payment options. With a user base of over 260 million in various markets, Uquid is well positioned to support the adoption of cryptocurrencies in everyday transactions.
The Importance of Stablecoins
Stablecoins, such as USDT, have seen increasing demand in recent years, reflecting the wider adoption of cryptocurrencies. Stablecoins are cryptocurrencies designed to maintain a stable value against a fiat currency, such as the US dollar. This makes them ideal for everyday transactions due to their stability and low transaction costs.
Stablecoins initially served as an on-ramp on centralised exchanges, but have now become vital liquidity providers in both centralised and decentralised markets. Proponents of stablecoins argue that their near-instantaneous and low-cost transactions make them ideal for revolutionising the payments industry.
Examples of stablecoin adoption
PayPal introduced its stablecoin PYUSD last year to facilitate instant and low-cost transfers within its payment infrastructure. Similarly, Stripe announced on 25 April that it will allow merchants to accept stablecoins for online transactions, starting with USDC on the Solana, Ethereum and Polygon blockchains.
The impact of stablecoins on cross-border payments
Stablecoins are also gaining traction for cross-border payments at the institutional level, highlighting their potential to revolutionise traditional financial systems. Recently, PayPal announced a feature that allows users to convert PYUSD to USD and use it as a funding source to send money to recipients in 160 countries.
Stablecoin Holding Trends
According to reports, stablecoin holdings among institutional and retail investors decreased from 50.2% in December to 42.8% in May. However, Bitcoin remains the largest asset held, accounting for 26% of total crypto assets held as of May 2024.
Retail traders, similar to institutions, continued to show a preference for BTC over ETH, despite renewed optimism for spot ETFs on ETH. Institutional positions in BTC and ETH are more concentrated than those of retail traders, with holdings of 39.4 percent and 20.9 percent, respectively, in May.
Since the SEC’s approval of Spot ETFs on Bitcoin in January 2024, institutional holdings of Bitcoin have steadily increased, while their positions in Ether have surprisingly decreased. This suggests that institutions see Bitcoin as a more attractive option, potentially due to concerns about Spot ETFs on Ether not including staking premiums.
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