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SAP’s Digital Currency Hub Uses Circle’s USDC Stablecoin To Test Cross-Border Payments

Milestone Date: June 22, 2023

Payments

SAP, the German software giant, is conducting trials with Circle's Ethereum-based USDC stablecoin to address challenges related to cross-border payments for its clients.

With the goal of simplifying international money transfers for businesses, SAP intends to use Circle’s US dollar-pegged stablecoin and its lesser-known Euro-pegged counterpart EUROC.

"Cross-border payments are a hassle for many small and mid-sized enterprises with international business partners. Expensive – up to $50 per transaction, slow – up to seven days to transmit the money, and non-transparent – you never know the status of the transaction,” said Sissi Ruthe, SAP Product Expert in this SAP blog post.

SAP launched a preview of the "SAP Digital Currency Hub” so customers can test drive the capability. Once a customer registers, they can receive the cryptocurrency as "play money" directly into an SAP-hosted wallet during onboarding.

One purpose of SAP's wallet architecture, as explained by SAP Incubation and Pioneering Executive Lloyd Keays in the video below, is to provide a gateway between an organization’s blockchain-based payments and its official accounting systems. Third party cryptocurrency wallets typically live apart from existing accounting workflows and therefore present more challenges in terms of using existing business accounting systems to accurately track cryptocurrency transactions (although Bitwave is one company with a solution that attempts to overcome those challenges). SAP's internally developed wallet architecture is designed in a way that ensures such cryptocurrency flows are recorded in the accounting system while still offering businesses control over the private keys associated with their wallets.

"SAP Digital Currency Hub is focused on our SME customer base, namely those using SAP Business One" SAP Digital Currency Hub Project Lead Bernhard Schweizer told Blockchain Journal. "For these customers, SAP will provide a wallet to manage the private key either running on the customer’s global account on SAP’s Business Technology Platform or on a hyperscaler like AWS. This component will complement the SaaS solution provided and operated by SAP and together form the SAP Digital Currency Hub. All is developed by SAP."

Once customers sign up for the pilot, they can use the play money to settle a sample invoice in a sandbox-like, complimentary test environment. The funds are non-usable in real-world transactions as they operate on a test network rather than the mainnet of any blockchain, and they do not involve real tokens. Schweizer told Blockchain Journal that the test-drive capability is built using the Goerli Testnet, one of two Ethereum testnets (the other is Sepolia). Meanwhile, the objective is to offer customers a firsthand experience of the speed, affordability, and dependability of blockchain-based, cross-border payments.

According to Ruthe's blog post, SAP plans to integrate the cryptocurrency capabilities into more than just the company's Business One offering, saying “Post the Test Drive, expect payments with Digital Money to get tightly integrated into the finance processes of your underlying SAP ERP system (SAP Business One, Business ByDesign, or S/4HANA Cloud), thus making it a fully automated process with autonomous reconciliation.”

By Elizabeth Morrison

Published:June 23, 2023

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SAP Clients Testing Circle’s USDC to Fix Cross-Border Payment ‘Hassle’

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