Layer 1 software from UK-based BVNK provides regulated financial institutions with the ability to manage custody of stablecoins as well as to send and receive payments that can be tied to that digital currency. The software handles stablecoin and fiat currency conversions in real time and also manages compliance, trading and liquidity. It provides infrastructure like a core banking system.

Operating on blockchains, Layer 1 provides an alternative to the combination of the Swift interbank messaging system and correspondent bank networks. Currently used for cross-border payments, Layer 1 can also handle settlement for credit and debit card payments.

Visa is an investor in BVNK. Should the Genius Act (Guiding and Establishing National Innovation for U.S. Stablecoins Act) be signed into law in the United States before the end of this year as expected, Visa and Mastercard will likely test the use of stablecoins for settlement of card transactions.

BVNK also offers an embedded wallet product that fintechs, payment service providers and nonbank merchant acquirers can use to accept stablecoins for payment, convert them to fiat currency and then make payouts to recipients in a fiat currency.

Use cases include B2B payments, remittances, corporate treasury and global settlements. Worldpay is a BVNK embedded wallet customer.

Payouts are facilitated through 10 bank partnerships that BVNK has established worldwide, including those with Barclays, Deutsche Bank and BBVA outside the US and Customers Bank, Lead Bank and Cross River Bank in the US. In the US, BVNK makes payouts via the RTP network, FedNow and the ACH using FBO (For Benefit Of) accounts.

Stablecoins are comparable to legacy bank payment systems in global reach but have the advantage of being irrevocable. This is not so with paper checks, card payments or ACH items.

For cross-border transactions, stablecoins and the blockchain rails they use have another advantage over legacy bank payment rails—they are not subject to bank closures on weekends or holidays.

Stablecoins are comparable in availability to real-time domestic-only payment rails including FedNow and the RTP network in the US, Faster Payments in the UK, UPI in India and Pix in Brazil. However, stablecoins are global.

Availability plus global reach could matter in particular to a company selling products from its home country into another country. That seller might use a credit card issued in the foreign market to pay for expenses such as shipping and advertising. If so, it must prefund (post collateral) to its account at an issuer’s or a fintech’s card sponsoring bank to cover card payments that need to be authorized. Any day(s) a bank is closed requires additional collateral to satisfy an issuer’s or sponsoring bank’s credit risk.

BVNK software effectively makes any weekend day or bank holiday look like a typical business day, which reduces the collateral amount required to fund card purchases, allowing sellers to better manage their capital. Highnote is a BVNK customer using stablecoins to fund card accounts.

Acquirers in any domestic market could use Layer 1 to support faster settlement with their merchant customers.

Companies including Highnote, LianLian, Ontop and Deel use software from BVNK as a payment orchestration layer to facilitate cross-border payouts in stablecoins to contractors, global merchants and remittance companies.