The Promise of Mr. Trump and Opportunities for the Fintech Industry Related to On-OffRamp in Vietnam
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This article does not reflect any political viewpoints and focuses solely on the fintech situation in Vietnam and globally.
Recently, during a campaign rally, at the Bitcoin 2024 Conference, former U.S. President Donald Trump made a promise to designate Bitcoin as a strategic reserve asset for the United States.
In this article, let us explore with FinFan the impact of this promise on the global cryptocurrency market in general and on Vietnam in particular, especially concerning businesses that provide blockchain technology services in cross-border payments, such as on/offramp solutions.
Trump and the Promise to Designate Bitcoin as a Strategic Reserve Asset for the United States
*Recently, U.S. presidential candidate Donald Trump made a startling speech at the Bitcoin 2024 Conference, in which he promised to transform the United States into a digital currency superpower and designate Bitcoin as a national strategic reserve asset.
At the Bitcoin 2024 Conference, Donald Trump stated that America would become the "center of digital currency" globally and a "Bitcoin superpower."
Additionally, Trump indicated that he would oppose the tightening of digital currency regulations by the U.S. Securities and Exchange Commission (SEC).
"Regulations should be written by those who love the digital currency market, not those who hate it," Trump declared.
Breaking News: Donald Trump Promises to Designate Bitcoin as a Strategic Reserve Asset for the U.S. if Elected President – Photo 2.
According to U.S. time, on the morning of July 27 at the Bitcoin 2024 Conference held in Nashville, Tennessee, former President Donald Trump delivered a speech that garnered significant attention from the cryptocurrency community.
At the conference, Trump announced that if re-elected as President, he would ensure that the government retains 100% of the Bitcoin it holds. He also promised to make Bitcoin one of the national strategic reserve assets.*
*Source: CafeF
The Impact of the Promise of Mr. Trump in General Cryptocurrency and On/Off-Ramp Solutions in Vietnam in Particular
The Impact in the Bitcoin’s Price
**During his speech, the price of Bitcoin experienced significant volatility. Initially, Bitcoin's price dropped sharply by $1,200 to below $67,000.
However, by the end of the speech, Bitcoin's price surged, completely recovering the earlier losses and even briefly surpassing $69,000.**
**Source: CafeF
The Impact of the Promise of Mr. Trump in General Cryptocurrency.
According to this promise, if the former President is re-elected, new regulations concerning digital currencies will be introduced to promote the growth and influence of these currencies, not only on the U.S. dollar but also on other international currencies when:
The Stablecoin Market will experience rapid Growth.
- To explain this growth, first let us, with FinFan, clarify the definition of stablecoin.
Stablecoins, a term that is no longer unfamiliar to crypto enthusiasts, are often used by coin players to convert the coins they are holding into these coins or take as the default valuation of coins on the market.
Why is that, because they are valued at par with some fiat currencies such as the US dollar, Australian dollar, Chinese yuan, etc.
Read more:
- Why can stablecoin become an alternative payment method to cash or fiat currency?
Stablecoins in particular, and cryptocurrencies in general, are created through the decentralized mechanism of blockchain technology.
***Blockchain provides irrevocable, real-time, cross-border transmission. With low banking penetration, strong demand for financial services, extremely high mobile penetration, and a developing financial infrastructure, the case for remittances using blockchain in Vietnam is strong.***
***Source: Russin and Vecchi
The unique features of blockchain, such as real-time money transfers, have enabled it to offer a cross-border payment solution that is “Faster - Safer - More Cost-Effective” for users worldwide, and specifically for cross-border remittances to Vietnam.
As illustrated by the chart comparing the cost of remittances to Vietnam mentioned by FinFan in its recent LinkedIn post, when sending remittances to Vietnam has incurred an approximate additional cost of 0.37% in service fees and approximately 0.83% in exchange rate fees, totaling approximately 1.2% on the amount of $500, which equals to around $6.
Read more:
. What Is Blockchain? – How Can the started like Science Fiction Thing change all Payment Systems?
However, a defining feature of this type of currency is that its value is pegged to the value of a fiat currency, as mentioned by FinFan earlier.
Stablecoin and the competition with USDC
Another application within the blockchain similar to stablecoins is Central Bank Digital Currencies (CBDCs), which are created and managed by the central banks of countries or territories.
Since Ecuador, the first country to experiment with CBDCs in 2014 with its “dinero electrónico” (DE), CBDC projects have rapidly emerged and are gradually developing on a global scale.
Read more:
. What are CBDCs? Should Vietnam have a CBDC for digitizing transactions?
. CBDC Story – Facts prove that CBDC could be the Most Effective Alternative Payment
. CBDC and Stablecoin – Which One is better for Nations to develop Their Currencies Online?
Some Businesses have developed and utilized Their own Stablecoins and are Experimenting with Them In Their Own Financial Services.
Some businesses have been and are currently developing stablecoin products in financial sectors such as:
- PayPal and the story of using Its PYUSD stablecoin for remittances
After acquiring Xoom in 2015 for $890 million, taking full ownership of the company, and making significant moves to grow the company from just serving a mere 39 countries in areas like Jamaica, the Dominican Republic, Asia nations, and Latin America becoming a company serving more than 163 countries worldwide.
However, this investment is currently not effective for PayPal as this technology company has continuously reported declining revenue in the last 4 years (from 2019 - 2023) coming from the overseas remittance segment.
Moreover, with the continuous development of competitors in the same field such as Remitly (FinFan’s partner), Ria Money Transfer (FinFan’s partner), Wise, etc.; Xoom is likely difficult to compete with these competitors without the support of PayPal and gives the feeling that Xoom is sucking PayPal's blood every day.
Even so, PayPal has no plans to sell this technology company despite the dissatisfied attitude from their investors. This happens when PayPal recognizes its growth potential in some areas.
For example, if customers wish to send money to someone outside of the PayPal ecosystem, they are directed to Xoom, from which they can initiate a payment to a recipient’s bank account, to collect in cash or through another payout method.
Primarily, PayPal envisions Xoom to pioneer the utilization of stablecoin for remittance, an area that has seemingly been overlooked or underdeveloped by other market competitors.
Read more:
- Stripe, one of the world’s largest fintechs, now offers merchants the ability to make payouts in crypto through the stablecoin USDC, which is issued by crypto firm Circle
Unlike PayPal, which developed its own stablecoin and applied it to international remittances, another major player in the cross-border payment sector, Stripe, has implemented strong policies to encourage merchants to use the USDC stablecoin for payments.
In April 2022, the company took significant steps by starting with tweets on its Twitter, now X, about the project.
Accordingly to CNBC news, the $95 billion online payments company announced that it would begin offering merchants the ability to make payouts in cryptocurrency through the USDC stablecoin, which is issued by the crypto firm Circle.
Opportunities for the Fintech Sector, especially On/Offramp Services in Vietnam
Enhanced Financial Inclusion:
On/off-ramp solutions are critical for enabling broader access to digital currencies. As Vietnam continues to embrace digital transformation, these technologies offer a means to integrate the unbanked population into the formal financial system.
The promise of greater financial inclusivity aligns with broader economic goals of expanding access to financial services.
Increased Investment Opportunities:
The introduction of advanced on/off-ramp solutions can attract international investors seeking to capitalize on Vietnam's growing fintech ecosystem.
The alignment of global economic policies with Vietnam's fintech growth presents an attractive proposition for foreign investment, potentially leading to increased funding and support for local startups.
Streamlined Cross-Border Transactions:
Vietnam's strategic position in the global supply chain makes efficient cross-border transactions crucial.
On/off-ramp solutions can simplify the conversion process, reducing transaction costs and improving the efficiency of cross-border payments. This enhancement supports Vietnam's growing role as a hub for international trade and investment.
Regulatory Harmonization:
While global trends emphasize deregulation, the evolving regulatory landscape in Vietnam presents an opportunity for alignment.
Collaborating with policymakers to ensure that fintech innovations adhere to regulatory standards can help build a robust and compliant financial ecosystem.
This alignment can facilitate smoother integration of on/off-ramp solutions within the existing regulatory framework.
This article was curated and authored by FinFan's market research and development team, alongside our marketing department.
About FinFan
FinFan is a cross-border embedded financial services company that focuses on mass disbursement, fund collection, card processing, IBAN, and digital APMs solutions, which can provide valuable input and integration on and for the same.
FinFan is already integrated with almost the world's well-known MTOs, PSPs, switch, and core fintech platforms such as Money Gram, Thunes, Qiwi, Remitly, World Remit, Bancore, PaySend, Terrapay, Ria Money Transfer (Euronet), Dlocal, Ripple, TripleA, FoMo Pay, Wings, etc.
For more information, please get in touch with us through:
🌐https://finfan.io
📞(+84) 2866 85 3317
✉ support@finfan.vn
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