Why Payward’s Reap Is Focusing on Non‑USD Stablecoins for Around‑the‑Clock Cross‑Border FX Settlement

Payward, the venture capital firm best known for backing the popular cryptocurrency exchange Kraken, has recently turned its attention to a new venture called Reap. Reap’s core ambition is to reshape the way businesses and individuals move money across borders by leveraging stablecoins that are not tied to the U.S.

dollar. While many stablecoin projects focus on a single, globally dominant fiat—typically the dollar—Reap believes that a broader basket of currency‑pegged tokens can unlock true 24/7 foreign‑exchange (FX) settlement, especially for markets that operate on different time zones and have distinct regulatory environments. ### The Rationale Behind Non‑USD Stablecoins The global FX market is the largest and most liquid financial market in the world, handling daily transaction volumes that dwarf even the most active equity markets. Yet, despite its size, the traditional FX ecosystem remains constrained by banking hours, legacy settlement systems, and a heavy reliance on correspondent banking networks.

These constraints often result in delayed settlements, higher transaction costs, and limited accessibility for smaller enterprises. Stablecoins, by design, aim to combine the price stability of fiat currencies with the speed and programmability of blockchain technology. However, the overwhelming majority of stablecoins—such as USDC, USDT, and BUSD—are pegged to the U.S. dollar.

This dollar‑centric approach can create bottlenecks for parties that need to transact in other currencies. For example, a Mexican exporter receiving payment in pesos may have to convert a USD‑pegged stablecoin into pesos via a secondary exchange, incurring additional fees and latency. Reap’s strategy is to sidestep this inefficiency by issuing stablecoins directly pegged to the local fiat of interest.

By doing so, it eliminates the need for an intermediate conversion step, reduces exposure to exchange‑rate risk, and streamlines the settlement process. Moreover, a portfolio of non‑USD stablecoins can serve regions where the dollar is not the primary medium of trade, thereby expanding financial inclusion and fostering deeper liquidity in those markets.

### The Mexican Peso Stablecoin Initiative Mexico represents a compelling case study for Reap’s approach. The country’s economy is heavily integrated with the United States, yet it maintains a robust domestic market that relies on the Mexican peso (MXN) for everyday transactions. Currently, businesses that wish to settle cross‑border payments in pesos must navigate a multi‑step process involving USD‑stablecoins, foreign‑exchange brokers, and traditional banking channels.

This workflow can be both time‑consuming and costly. Reap plans to launch a peso‑backed stablecoin—tentatively named “ReapMXN”—that will be fully collateralized with Mexican pesos held in regulated custodial accounts. The token will be minted on a public blockchain that supports high throughput and low transaction fees, such as Polygon or Solana, ensuring that transfers can be executed instantly, regardless of the time of day.

By providing a native MXN stablecoin, Reap aims to enable Mexican exporters, importers, and freelancers to receive payments directly in a digital asset that mirrors the value of their local currency, without the need for conversion. ### Exploring Additional Currency Tokens: HKD, EUR, KRW, and JPY Beyond the peso, Reap is actively researching the feasibility of stablecoins linked to the Hong Kong dollar (HKD), euro (EUR), South Korean won (KRW), and Japanese yen (JPY). Each of these currencies presents unique opportunities and challenges: - **Hong Kong Dollar (HKD):** Hong Kong serves as a major financial gateway to mainland China and the broader Asia‑Pacific region.

A HKD‑stablecoin could facilitate seamless trade between Chinese enterprises and global partners, especially given Hong Kong’s well‑established legal framework for digital assets. - **Euro (EUR):** As the world’s second‑largest reserve currency, the euro underpins a vast economic bloc. A euro‑pegged stablecoin would appeal to businesses operating across the European Union, offering a unified digital settlement layer that respects the bloc’s regulatory standards.

- **South Korean Won (KRW):** South Korea’s tech‑savvy population and thriving e‑commerce sector make it an ideal market for a KRW stablecoin. It could also serve the broader Northeast Asian market, where cross‑border e‑commerce is rapidly expanding. - **Japanese Yen (JPY):** Japan’s financial institutions are increasingly experimenting with blockchain solutions.

A JPY stablecoin could integrate with existing banking infrastructure, providing a bridge between traditional finance and decentralized finance (DeFi) ecosystems. For each currency, Reap is conducting rigorous due‑diligence, assessing regulatory requirements, custodial arrangements, and market demand.

The goal is to ensure that every token is fully compliant, transparently audited, and backed by liquid reserves that can be verified on‑chain. ### Benefits of 24/7 Cross‑Border Settlement The introduction of these non‑USD stablecoins promises several tangible advantages: 1. **Instantaneous Settlement:** Blockchain‑based transfers settle in minutes, compared to the days‑long processing times of conventional banking.

2. **Reduced Costs:** By eliminating multiple conversion steps and correspondent banking fees, participants can save on transaction costs. 3.

**Enhanced Liquidity:** Directly pegged tokens increase the depth of liquidity pools for each currency, making it easier for market makers to provide competitive pricing. 4. **Financial Inclusion:** Small and medium‑sized enterprises (SMEs) that lack access to sophisticated FX desks can now participate in global trade with the same efficiency as larger corporations.

5. **Regulatory Transparency:** On‑chain audit trails provide regulators with clear visibility into token issuance and redemption, fostering trust and compliance.

### Challenges and Mitigation Strategies While the vision is compelling, Reap must navigate several hurdles: - **Regulatory Scrutiny:** Each jurisdiction has its own stance on stablecoins. Reap is partnering with local legal experts and regulators to obtain the necessary licenses and to design governance frameworks that satisfy anti‑money‑laundering (AML) and know‑your‑customer (KYC) obligations.

- **Collateral Management:** Maintaining fully backed reserves requires robust custodial solutions. Reap plans to employ multi‑signature vaults and regular third‑party attestations to guarantee that every token is underpinned by the appropriate fiat.

- **Market Adoption:** Convincing businesses to shift from established banking channels to a new digital token involves education and incentives. Reap intends to offer reduced fees for early adopters and integrate with popular accounting software to streamline the user experience.

- **Technical Resilience:** The chosen blockchain must handle high transaction volumes without congestion. Reap is evaluating layer‑2 scaling solutions and may deploy its own sidechain to ensure consistent performance. ### The Road Ahead Reap’s roadmap outlines a phased rollout. The first milestone is the launch of the MXN stablecoin, targeted for the second quarter of next year, followed by pilot programs for the HKD and EUR tokens later in the same year.

Subsequent phases will introduce KRW and JPY, contingent on regulatory clearance and market demand. By championing a suite of non‑USD stablecoins, Reap aims to democratize cross‑border payments, offering a truly global, always‑on settlement layer. If successful, this model could reshape the FX landscape, reducing reliance on legacy banking infrastructure and paving the way for a more inclusive, efficient, and transparent international trade ecosystem.