Elon Musk's SpaceX Uses Stablecoin to Hedge Foreign Exchange Risks

Venture capitalist Chamath Palihapitiya in Silicon Valley said on the All-In podcast on Friday that SpaceX is using stablecoin to mitigate foreign exchange risk. Foreign exchange risk refers to the potential losses that can arise from the significant fluctuations of a currency. For example, if a US company has customers in Brazil who pay in Real (BRL), the company may incur losses when converting to US dollars. Using Stablecoin as a Defense Fence According to Palihapitiya, SpaceX collects money from all Starlink customers in "long-tail countries" and converts them into stablecoin. Starlink, wholly owned by Elon Musk's SpaceX, provides satellite internet services. Palihapitiya said the company will convert the stablecoin back to US dollars. "When they [SpaceX] aggregate those payments in all these long-tailed countries, they don't necessarily want to take the foreign exchange risk. They don't want to settle money through a wire." According to Palihapitiya, stablecoin should become the primary method for cross-border transactions in the United States, which will allow us to eliminate the outdated infrastructure that banks use to slow down and tax a process that should never be taxed. Stablecoin Providers Compete With Traditional Financial Institutions Stablecoin providers like Tether and Circle are emerging as formidable competitors to banks in storage and money transfer services. But stablecoin providers are not only competing with banks. Stablecoin providers are also competing with traditional payment companies like MasterCard and American Express, Palihapitiya said. He further stated that reducing cross-border money transfer costs, even as low as 3% - the fee currently imposed by Stripe - "will bring benefits to global GDP (gross domestic product)". Aaron Levie, CEO of the enterprise cloud computing company Box, agreed with Palihapitiya and said that using stablecoin as a substitute for traditional transaction methods is "completely reasonable". With SpaceX run by Elon Musk, a DOGE meme coin fan, it's no surprise that the company used Elon Musk's stablecoin Tesla, which invested heavily in Bitcoin - a clear investment that paid off when the investment value exceeded $1 billion last month when the price of Bitcoin (BTC) began to soar after Donald Trump's election victory. Since taking over Twitter and renaming the social media platform to X, Musk has allowed X users to send Bitcoin and other cryptocurrencies as 'boa money' to other users. There is also widespread speculation about the role of cryptocurrencies in X's upcoming payment feature. DYOR! #Write2Win #Write&Earn $DOGE {spot}(DOGEUSDT)