Sep 20, 2021
The global financial industry is on a path of digital transformation. While the Internet ushered in an era of online banking and digital payments, blockchain technology is poised to catapult the digitization of financial services into a new era of openness, borderlessness, and accessibility.
Algorand is at the forefront of this development, pioneering next-generation blockchain solutions for the future of finance.
Read on to learn how Algorand provides the required payment infrastructure for the digital-first future of financial services:
The global payment ecosystem has been rapidly evolving thanks to the integration of innovative features coming from fintech companies. Many of the features are adopted quickly to meet the ever-growing demand for faster and more secure payment operations.
Today, blockchain can bring even more perks to the payments industry, and Algorand is the exemplary distributed ledger network for building secure and scalable payment infrastructures for the future of finance.
Before delving into Algorand’s features that could benefit the payment market, it makes sense to quickly explain why blockchain is highly beneficial for the global finance industry.
Here are the main aspects related to payments operations that can be improved with the distributed ledger technology (DLT).
While there are several public blockchains as well as permissioned chains that can host payment use cases, Algorand is the superior option thanks to its Pure Proof of Stake (PPoS) consensus algorithm and developer-friendly environment.
Algorand was designed for FutureFi, allowing users to develop secure, scalable payment infrastructures and financial applications.
The PPoS consensus mechanism invented by MIT Professor Silvio Micali enables rapid, low-cost payment transactions with almost instant finality across a truly decentralized network.
The protocol’s unique design revolves around a key aspect that makes the PPoS secure and scalable: randomness. The protocol selects a small group of validators for the next block randomly and secretly. Thus, potential attackers are in a position of constant uncertainty about current block validators, being unable to cause any damage to the network.
Besides providing a secure environment for payment use cases, the PPoS algorithm ensures the high speed and low cost of transactions, as there is no competition between validators as in the case of Proof of Work blockchains.
Algorand’s PPoS algorithm provides the following features for digital payment systems:
One of the major milestones towards creating a better ecosystem for FutureFi is the partnership between Algorand and Circle. As a result, the PPoS-based network hosts Circle’s USDC, one of the leading stablecoins in the global crypto markets.
Stablecoins are currently the most suitable blockchain-based assets for digital payments, considering that cryptocurrencies like bitcoin show extreme volatility, preventing them from acting as efficient means of exchanges.
USDC on Algorand is one of the most secure and stable assets, as it combines the features of Algorand’s Layer-1 network with USDC’s stable peg to the US dollar and Circle’s regulatory compliance.
Circle is a global fintech company that allows businesses of all sizes to leverage the power of stablecoins and public blockchains for payments and other financial applications worldwide.
Businesses and developers looking to build frictionless systems for digital payments on Algorand can explore existing use cases, as the network has already been adopted in the payment industry.
One of the most relevant examples is Bleumi Pay, a non-custodial crypto payment solution designed for eCommerce. The platform is operated by Boston-based company Bleumi, which chose Algorand due to its features powered by the PPoS algorithm. Thomas Arul, CEO and co-founder of Bleumi, commented on the network:
“Their protocol offers unprecedented levels of performance and speed at a fraction of the cost compared to other competing networks, which is essential for everyday payments and payouts use cases.”
Thanks to Algorand, Bleumi Pay offers support for ALGO, Algorand Standard Assets (ASA), including USDC, as well as any future Central Bank Digital Currency (CBDC) to be built on Algorand.
With Bleumi Pay, businesses of all sizes can integrate payment and payout operations conducted in Algorand-based assets.
Earlier this year, Italian Caffè Barbera, one of the largest coffee suppliers in the world, integrated Bleumi Pay. In 2020, the company became the first coffee producer in Europe to enable crypto payments on its eCommerce site.
Algorand’s high-performing platform is poised to play a leading role in the major upgrade of the payments industry.
Download our report on The Future of Global Payments to learn more about how blockchain brings us to FutureFi.