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SAP Explores Blockchain-Based Cross-Border Payments with USDC on Ethereum Testnet

Jun 28, 2023

SAP Pioneers Cross-Border USDC Payments on Ethereum's Testnet

Multinational software giant SAP is taking a significant step towards revolutionising cross-border payments by conducting trials using the Ethereum blockchain's Goerli testnet. The company aims to address the longstanding pain points of slow and costly international transactions. By leveraging Circle's USDC stablecoin, SAP plans to offer interested businesses a chance to test the efficiency and transparency of blockchain-powered payments. SAP's Digital Currency Hub will enable participants to receive test USDC on the Goerli testnet, facilitating sample invoice payments and collecting valuable feedback on the solution.


Bernhard Schweizer, Chief Product Expert and Project Lead of SAP Digital Currency Hub, expressed confidence in digital money's potential to overcome the challenges associated with traditional cross-border payments. SAP's long-term vision includes integrating blockchain-based payment processes into its mid-market enterprise resource planning (ERP) solutions, creating a seamless experience for issuing invoices and executing payments in digital currencies. The company also recognises the broader applications of cryptocurrencies in payment scenarios, such as commerce and employee payments, signalling its commitment to exploring innovative solutions beyond cross-border transactions.


With stablecoin payments offering rapid settlement times and lower costs, SAP's initiative seeks to address two primary concerns hindering widespread adoption. First, the volatility associated with cryptocurrencies is mitigated through the use of stablecoins. Second, SAP's Digital Currency Hub aims to bridge the gap between blockchain ledgers and existing accounting systems, ensuring easy tracking of payments through conventional means. However, it is crucial to note that payment recipients must be willing to accept stablecoins and possess the necessary infrastructure to receive them seamlessly.


While central banks remain cautious about stablecoins and prioritise the development of central bank digital currencies (CBDCs), SAP's move highlights the urgency to accelerate progress in the digital payments landscape. The European Central Bank's reservations about stablecoins backed by central bank money illustrate the risks involved. To counter these risks, banks are exploring alternative solutions, including deposit tokens, to harness the efficiency benefits of blockchain payments. JP Morgan's JPM Coin and various German banks' forays into deposit tokens exemplify this trend.


SAP's endeavor in blockchain-based cross-border payments and stablecoin trials suggests a need for the financial industry to act swiftly and adapt to evolving payment technologies. As central banks deliberate on CBDCs, the efficiency gains of blockchain payments pose potential disruption to the lucrative corporate banking sector. SAP's progressive stance could prompt other industry players to expedite their own efforts, recognising the urgency to stay ahead in this rapidly evolving landscape.


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