Elon Musk’s company SpaceX utilizes stablecoins to mitigate currency risks, according to Chamath Palihapitiya, founder of Social Capital, during the All-In podcast.

Currency risks can arise from sharp exchange rate fluctuations. For instance, a U.S.-based company with clients in Brazil paying in reals could incur losses when converting to dollars.

According to Palihapitiya, SpaceX accepts payments for Starlink services in low-income countries and converts them into stablecoins.

“When they [SpaceX] aggregate payments from developing countries, they don’t want to take on the risks associated with currency exchanges. They don’t want to deal with international transfers,” the expert explained.

He further noted that stablecoins are poised to become the primary tool for cross-border payments, helping the U.S. move away from “the outdated banking infrastructure that slows down and taxes processes that should never have been complicated in the first place.”

Palihapitiya added that stablecoin issuers like Circle and Tether are not only competing with banks but also with payment giants such as MasterCard and American Express.

Reducing the cost of cross-border payments by even 3% (the fee charged by companies like Stripe) could positively impact global GDP, according to the investor.

Box CEO Aaron Levie echoed this sentiment, stating that replacing resource-intensive traditional intermediaries “absolutely makes sense.”

Earlier, Palihapitiya referred to Bitcoin as insurance against inflation.

Reminder: In June, the venture investor predicted Bitcoin could reach $500,000.