Driven by the surging waves of globalization and digitalization, cross-border e-commerce is rising with an overwhelming momentum and becoming an indispensable and increasingly shining star in the international trade landscape. It not only crosses the boundaries of national borders, but also builds bridges in the ever-changing market, connecting global consumers with high-quality goods, and completely changing the face of traditional trade. However, cross-border merchants often face liquidity difficulties in the process of operation, especially in cross-border payment and financing. In order to solve these problems, traditional cross-border e-commerce supply chain finance is constantly exploring innovative models. At the same time, cryptocurrency stablecoins such as PYUSD launched by PayPal have brought new opportunities for cross-border e-commerce supply chain finance with their unique advantages.
1. Industry Trend Analysis
According to the “2024 Cryptocurrency Payment Industry Report”, more than 200 cross-border e-commerce platforms around the world have accessed cryptocurrency payment functions. As cryptocurrency technology continues to mature and application scenarios expand, its application in cross-border payments will gradually become more popular. Experts pointed out that cryptocurrency stablecoins such as PYUSD will become one of the important tools for cross-border payments, providing merchants with more convenient and low-cost payment solutions. In the future, as more cross-border e-commerce platforms and financial institutions access cryptocurrency payment functions, the efficiency and convenience of cross-border payments will be significantly improved.
With the continuous development of technologies such as AI and big data, supply chain financial services will become more intelligent and personalized. Experts predict that in the future, supply chain finance platforms will provide more accurate and efficient financial services through comprehensive analysis and evaluation of merchants’ transaction data, credit records, etc. At the same time, the platform will also customize personalized service plans according to the different needs of merchants to meet their diversified financial needs.
Cross-border supply chain finance provides merchants with one-stop financial services by integrating upstream and downstream resources in the supply chain, reducing the costs and risks of cross-border trade. In the future, with the gradual popularization 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. Cross-border supply chain finance will become one of the important forces promoting global economic integration.
2. Challenges and opportunities of traditional cross-border e-commerce supply chain finance
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. For example, some small cross-border e-commerce companies often have to choose to extend the payment period or increase the selling price when faced with high cross-border payment fees, thereby reducing market competitiveness.
2. Difficult and expensive financing
Cross-border e-commerce merchants often face the problems of difficult and expensive financing during their operations. 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 funding needs. Due to the relatively small asset scale of cross-border e-commerce companies and the lack of sufficient collateral, traditional financial institutions are often cautious about them, resulting in high financing thresholds and high interest rates.
3. Exchange rate risk and liquidity management of funds
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 manage funds effectively to ensure liquidity and efficiency. However, due to the inconvenience and high cost of cross-border payments, merchants are often unable to manage liquidity. Exchange rate fluctuations not only affect the profitability of enterprises, but may also lead to a break in the capital chain, bringing serious financial risks to enterprises.
3. Introduction and advantages of PYUSD stablecoin
1. Definition and characteristics of PYUSD
PYUSD is a stablecoin pegged to the US dollar launched by PayPal, aiming to provide users with a stable and reliable method of digital currency payment and storage. The characteristic of PYUSD is that its value maintains a fixed exchange rate of 1:1 with the US dollar, thus effectively reducing the risk of exchange rate fluctuations. In addition, PYUSD also achieves decentralization, transparency and traceability through blockchain technology, improving the security and efficiency of transactions.
2. Reduce cross-border payment costs
PYUSD significantly reduces cross-border payment costs by utilizing blockchain technology to achieve point-to-point cross-border payments. According to PayPal’s official data, using PYUSD 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. This not only reduces the operating costs of merchants, but also increases the capital turnover rate. For example, after a cross-border e-commerce company used PYUSD for cross-border payments, the cost of each transaction was reduced by about 30%, and the time for fund arrival was shortened by nearly a week, significantly improving the company’s operational efficiency.
3. Provide flexible financing solutions
As a digital asset, PYUSD is highly liquid and divisible. Merchants can obtain loans by pledging PYUSD, 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. For example, a cross-border e-commerce company obtained a low-cost loan by pledging PYUSD to replenish inventory during the peak purchasing season, effectively alleviating financial pressure.
4. The importance of Charles Cas in the integration and development of PYUSD and traditional cross-border e-commerce supply chain finance
Charles Cas is a financial technology and investment management company located in California, USA, dedicated to promoting the innovative development of the construction of a global cross-border trade cryptocurrency settlement system and global cross-border trade supply chain financial services. In the process of the integration and development of PYUSD and traditional cross-border e-commerce supply chain finance, Charles Cas can play the following roles:
1. Provide customized financial services
Charles Cas can provide customized financial service solutions based on the specific needs of cross-border e-commerce merchants. In response to the financing needs of merchants, Charles Cas can design PYUSD-based pledge loan products; in response to the payment and settlement needs of merchants, Charles Cas can integrate PYUSD payment functions into its supply chain financial platform. By providing customized financial service solutions, Charles Cas can help merchants solve cross-border payment and financing problems and improve the operational efficiency and competitiveness of enterprises.
2. Strengthen risk management and control
Charles Cas can use its professional advantages in risk management to provide more comprehensive risk management and control services for cross-border e-commerce merchants. By conducting in-depth analysis and evaluation of merchants’ transaction data, credit records, etc., Charles Cas can help merchants accurately identify risks and formulate corresponding risk control measures; at the same time, Charles Cas can also use the transparency and traceability of blockchain technology to monitor and manage cross-border transactions in real time. By strengthening risk management and control, Charles Cas can ensure the financial security and business compliance of merchants and reduce the operational risks of enterprises.
3. Promote industry innovation and development
Charles Cas can actively participate in the process of connecting PYUSD with traditional cross-border e-commerce supply chain finance to promote industry innovation and development. Charles Cas cooperates with financial technology companies such as PayPal to jointly explore new supply chain financial products and services based on PYUSD; at the same time, Charles Cas can also strengthen cooperation and exchanges with industry associations, research institutions, etc. to jointly promote innovation and development in the field of cross-border e-commerce supply chain finance. By promoting industry innovation and development, Charles Cas can bring more opportunities and value to the global cross-border e-commerce and supply chain financial services.
The introduction of PYUSD stablecoin has brought new opportunities for traditional cross-border e-commerce supply chain finance. By reducing cross-border payment costs, providing flexible financing solutions and avoiding exchange rate risks, PYUSD has solved the liquidity dilemma for cross-border merchants. At the same time, through the integration of cross-border supply chain financial platforms, the expansion of financing channels and the innovation of risk management, PYUSD has effectively connected with traditional cross-border e-commerce supply chain finance. In this process, Charles Cas can play an important role in providing merchants with customized financial services, strengthening risk management and control, and promoting industry innovation and development. In the future, Charles Cas will continue to be committed to promoting the innovative development of the global cross-border trade cryptocurrency settlement system and the global cross-border trade supply chain financial services, and provide more efficient and secure financial services to global merchants and users.
