Throughout the course of recent years, the advancement of blockchain innovation brought us new sorts of computerized resources, for example, stablecoins and digital currencies. These developments offer the establishments for building new installment rails that can get esteem across the globe progressively as well as at a much lower cost. Not at all like digital forms of money like Bitcoin or Ethereum, stablecoins are essentially less unstable as they are regularly fixed to a government issued money like the U.S. dollar. Stablecoins likewise pushed legislatures to speed up their investigation of national bank advanced monetary standards (CBDCs). While digital currencies depend on decentralized networks for their tasks, CBDCs would run on open area framework and address an immediate responsibility of the national bank — basically "computerized cash."

How Slow and Expensive Payments Hurt Small Businesses
Today, most U.S. consumer payments are made via credit cards, a trend that accelerated during the Covid-19 pandemic. While entirely invisible to customers, merchants pay fees — to card-issuing banks, card-network assessment, and payment processors — that can reach above 3% of the transaction value, and are likely to increase in the near future. Online transactions, mainly through marketplace platforms such as Amazon or Shopify, can be even more expensive. Additionally, it can take several days to actually receive the funds, which increases the working capital needs for small businesses.

This puts small businesses at a clear disadvantage, particularly given their thin margins, limited cash buffers, and expensive financing costs. While large businesses, such as Costco, can negotiate significantly lower fees when accepting digital payments, small businesses do not have much negotiating power. Right now, there are few alternatives to the major card networks, meaning that small businesses operating on small margins do not have a choice but to attempt to pass part of the fees to customers through higher prices, which lowers their ability to compete with deeper pocket rivals.

These problems are magnified when dealing with cross-border transfers, where fees and delays are incredibly high. As of the second quarter of 2021, the average cost of sending a cross-border payment from the United States was 5.41 percent, and SWIFT payments can take between one to five business days. Moreover, fees are unpredictable, and businesses may incur additional costs depending on the number of correspondent banks involved in the transaction. The complexity of the payment chain makes international payments also a lucrative target for scams and fraud, further increasing its costs.

How Blockchain Technology Can Help
To change this, we need a more open and competitive payments infrastructure. To achieve that, critically important public-sector efforts such as FedNow and CDBCs need to be combined with private sector innovation — including permissionless cryptocurrency networks. Public-sector efforts inevitably move at a glacial pace, and there is a real risk that they will be severely outpaced by innovation happening elsewhere, often within “walled gardens” that lock consumers and businesses into non-interoperable services.

But this does not have to be the case. The public sector can take advantage of the technical progress happening within the blockchain and cryptocurrency space to accelerate its journey towards real-time, low-cost payments.

An open payments system will drive competition, lower transaction fees, and unbundle the services that are currently part of all digital transactions — including those related to reversibility and chargebacks, intermediation, transaction risk assessment, and more — helping businesses pay only for what they actually need. Ideally, thanks to new forms of interoperability between digital wallets, banks, and legacy payment and card rails, small businesses would be able to do so without compromising which customers they can accept payments from. Moreover, transferring funds directly through a blockchain would benefit domestic and cross-border payments by reducing the number of intermediaries in the picture.

how small business are hurt !!
If this evolution of payments is successful, small businesses would experience not only lower costs but also faster access to funds. This would drastically improve their liquidity and cash buffers, and help them survive negative economic shocks and thrive.
By creating the right conditions for a truly open and interoperable protocol for money to emerge, very much like in the early days of the internet, the public sector can bring back competition to payments, and give small businesses much-needed choice.

To change this, we need a more open and competitive payments infrastructure. To achieve that, critically important public-sector efforts such as FedNow and CDBCs need to be combined with private sector innovation — including permissionless cryptocurrency networks. Public-sector efforts inevitably move at a glacial pace, and there is a real risk that they will be severely outpaced by innovation happening elsewhere, often within “walled gardens” that lock consumers and businesses into non-interoperable services.

But this does not have to be the case. The public sector can take advantage of the technical progress happening within the blockchain and cryptocurrency space to accelerate its journey towards real-time, low-cost payments.

An open payments system will drive competition, lower transaction fees, and unbundle the services that are currently part of all digital transactions — including those related to reversibility and chargebacks, intermediation, transaction risk assessment, and more — helping businesses pay only for what they actually need. Ideally, thanks to new forms of interoperability between digital wallets, banks, and legacy payment and card rails, small businesses would be able to do so without compromising which customers they can accept payments from. Moreover, transferring funds directly through a blockchain would benefit domestic and cross-border payments by reducing the number of intermediaries in the picture.

If this evolution of payments is successful, small businesses would experience not only lower costs but also faster access to funds. This would drastically improve their liquidity and cash buffers, and help them survive negative economic shocks and thrive.

By creating the right conditions for a truly open and interoperable protocol for money to emerge, very much like in the early days of the internet, the public sector can bring back competition to payments, and give small businesses much-needed choice.

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