Driven by the wave of globalization, cross-border e-commerce has become an important part of international trade. However, cross-border merchants often face liquidity difficulties in their operations, especially in terms of capital recovery and cross-border payments. In order to solve these problems, global supply chain financial services are actively exploring innovative models, among which the introduction of cryptocurrencies is particularly eye-catching. As the world’s leading payment platform, PayPal has launched a stable currency PYUSD (cryptocurrency) pegged to the US dollar. PYUSD not only has the stable value of the US dollar, but also realizes the convenience and security of cross-border payments through PayPal’s global payment network. When merchants use PYUSD for cross-border payments, they can enjoy preferential treatment such as instant arrival and reduced handling fees. At the same time, the stable value of PYUSD also helps merchants avoid exchange rate risks and improve capital liquidity.
1. The scale of cross-border e-commerce market continues to grow
According to the 2024 Global Cross-border E-commerce Market Report, the global cross-border e-commerce market is expected to reach 4.9 trillion US dollars, with a compound annual growth rate of more than 20%. As the cross-border e-commerce market continues to expand, merchants’ demand for efficient and convenient financial services will continue to grow. According to the 2024 Cryptocurrency Payment Industry Report, more than 200 cross-border e-commerce platforms around the world have access to cryptocurrency payment functions, covering clothing, electronic products, household goods and other fields. With the continuous maturity of cryptocurrency technology and the expansion of application scenarios, its application in cross-border payments will gradually become popular.
2. Liquidity Dilemma Faced by Cross-border E-commerce
1. High cost and complexity of cross-border payments
The traditional cross-border payment system involves multiple intermediate links, including banks, payment institutions, etc., resulting in high payment costs and complex processes. According to the “2023 Cross-border E-commerce Payment Industry Report”, the average cross-border payment fee is as high as 3% to 5% of the transaction amount, and the arrival time usually takes 3-7 working days. This not only increases the operating costs of merchants, but also affects the capital turnover rate.
2. Tight capital chain and difficulty in financing
Cross-border e-commerce merchants often face the problem of tight capital chain during operation. Especially during the peak purchasing season or business expansion, merchants need a lot of capital investment, but traditional financing channels often cannot meet their fast and flexible capital needs.
3. Exchange rate risk and capital liquidity management
Cross-border trade involves settlement in multiple currencies, and exchange rate fluctuations bring considerable risks to merchants. At the same time, merchants also need to effectively manage funds to ensure capital liquidity and efficiency. However, due to the inconvenience and high cost of cross-border payments, merchants are often unable to manage capital liquidity.
3. Cryptocurrency empowers cross-border e-commerce opportunities
1. Reduce cross-border payment costs
Cryptocurrency, with its decentralized and peer-to-peer characteristics, can significantly reduce the cost of cross-border payments. Taking PYUSD as an example, its transaction fees are usually lower than traditional cross-border payment systems. In addition, cryptocurrency payments can also achieve instant payment and improve the capital turnover rate. According to the “Research Report on the Application of Cryptocurrency in Cross-Border Payments”, using cryptocurrency for cross-border payments can reduce the cost to less than 1% of the transaction amount, and the payment time is shortened to a few minutes.
2. Provide flexible financing solutions
Cryptocurrency assets are highly liquid and divisible, providing flexible financing solutions for cross-border e-commerce merchants. Merchants can obtain loans by pledging crypto assets, or raise funds through platforms such as cryptocurrency exchanges. These financing methods usually have the advantages of fast approval and simple procedures, and can meet the fast and flexible funding needs of merchants.
3. Avoid exchange rate risks
As a globally accepted digital asset, the price of cryptocurrency is relatively stable (especially stablecoins), which can effectively avoid exchange rate risks. Merchants can reduce the impact of exchange rate fluctuations on their business by converting part of their funds into cryptocurrency for storage and transactions. In addition, some cryptocurrency exchanges also provide exchange rate hedging tools to help merchants better manage exchange rate risks.
IV. Innovative Model of Global Supply Chain Financial Service Platform
The Global Supply Chain Financial Services Platform is an innovative financial solution designed for global cross-border trade merchants to meet their capital flow and risk management needs in global trade. Global supply chain financial services connect the cryptocurrency resources of individual cryptocurrency service providers around the world, through convenient, fast, secure, anonymous and transparent cryptocurrency settlement methods, apply AI intelligent screening and supervision of transaction orders, and use cryptocurrency for efficient, transparent and real-time settlement to meet the urgent needs of cross-border trade merchants for flexible financial services in the rapidly growing B2B2C model. The Global Supply Chain Financial Services Platform was created by Charles Cas, a financial technology and investment management company located in California, USA, dedicated to promoting the construction of a global cross-border trade cryptocurrency settlement system and the innovative development of global cross-border trade supply chain financial services. The platform has three advantages:
1. Cross-border supply chain financial platform
Cross-border supply chain financial platforms provide merchants with one-stop financial services by integrating upstream and downstream resources of the supply chain. These platforms usually include functional modules such as financing, payment settlement, and risk management, which can meet the diversified financial needs of merchants in cross-border trade.
2. Cryptocurrency settlement system
With the continuous maturity of cryptocurrency technology and the expansion of application scenarios, more and more cross-border supply chain financial platforms have begun to introduce cryptocurrency settlement systems. This system reduces cross-border payment costs and risks by utilizing blockchain technology to achieve decentralization, transparency, and traceability of transactions. At the same time, the cryptocurrency settlement system can also improve capital turnover and utilization efficiency, creating greater value for merchants.
3. AI intelligent risk control and credit assessment
AI intelligent risk control and credit assessment technology is becoming an important support for cross-border supply chain financial services. By using big data, machine learning and other technical means, the platform can conduct a comprehensive analysis and assessment of merchants’ transaction data, credit records, etc., so as to accurately identify risks and formulate corresponding risk control measures. In addition, AI intelligent risk control and credit assessment can also improve the speed and efficiency of financing approval, and provide merchants with more convenient and efficient financial services.
V. Core Strategies and Objectives of the Global Supply Chain Financial Services Platform
1. Popularize and deepen the application of PYUSD: Relying on the excellent stability and global recognition of PayPal USD, we are committed to building a borderless and efficient cryptocurrency settlement network to lead the new trend of global payment.
2. Build a new ecology of cross-border trade encryption settlement: Tailor-made for cross-border trade merchants, realize low-cost and high-efficiency cross-border settlement through cryptocurrency, and help merchants cross borders and move smoothly.
3. Link global merchants and users and establish a supply chain financial system: We are committed to improving the liquidity of supply chain finance, optimizing the global market operation process, and bringing a smoother and more efficient business experience to global merchants and users.
VI. Conclusion
Cryptocurrency empowering cross-border e-commerce has become a new trend in global supply chain financial services. By reducing cross-border payment costs, providing flexible financing solutions and avoiding exchange rate risks, cryptocurrency has solved the liquidity dilemma for cross-border merchants. At the same time, with the continuous innovation and improvement of cross-border supply chain financial platforms and the application of AI intelligent risk control and credit assessment technologies, merchants will enjoy more convenient, efficient and secure financial services. In the future, with the gradual popularization of the application of cryptocurrency in cross-border payments and the intelligent and personalized development of supply chain financial services, global trade will usher in a new era of greater prosperity and development.
