# Stablecoin Conversion Service

### Overview

Intersect now offers an **optional stablecoin conversion service** for vendors who wish to receive their smart contract payments in stablecoins rather than ada. This service is designed to give vendors a way to hedge against ADA price volatility, but it is optional. The default, and primary, approach remains ada**-first**.

If you do not wish to use this service, your contract will proceed in ada as normal and no additional fee applies.

***

### Available Stablecoins

If you elect to use the stablecoin conversion service, you may choose to receive payments in one of the following:

* **USDCx**
* **USDM**

***

### The 1% Conversion Fee

* A fee of **1% of your total budget ask** applies if you choose stablecoin conversion
* Unlike the 3% administration fee which is added on top of your budget ask via the Intersect budget submission form, the 1% stablecoin conversion fee is **deducted from your budget ask.** It does not increase your total budget request.
* The fee covers trading and minting costs, plus the resource overhead of managing the conversion process.

{% hint style="info" %}
*Example: If your budget ask is ₳100,000, the conversion fee of ₳1,000 will be deducted, and the stablecoin equivalent of the remaining ₳99,000 will be available to fund your vendor specific smart contract, which can be withdrawn through our milestone delivery assurance process.*
{% endhint %}

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#### This Is an Optional Service

It is important to emphasise that stablecoin conversion is a choice.

* You are not required to use it.
* The budget process promotes an ada-first approach.
* Stablecoin conversion is an **additional service** offered to support vendors who wish to reduce their exposure to ada volatility.
* If you do not want to pay the 1% fee, simply proceed with an ada contract as normal.

***

### Rules and Restrictions

**You cannot mix currencies within a single contract.**

Your contract must be denominated entirely in one of the following: ada, USDCx, or USDM. A combination is not permitted. 

**Your selection is final.**

Once the ada has been disbursed to the Third Party provider, your currency selection is locked and cannot be changed. Whilst there are mechanisms to modify smart contracts in terms of milestones, payment dates and cancellation they do not currently allow hot-swapping of assets.

***

### Exchange Rate and Stablecoin Amount

By choosing the stablecoin conversion service, you acknowledge and accept the following:

* Intersect, as administrator, cannot guarantee the exchange rate. The conversion will be carried out at the prevailing market rate at the time of exchange. *(Note this could be over a period of days for large trades).*
* As a result, **we cannot guarantee the exact amount of stablecoins you will receive** following the exchange process.
* The exchange will be carried out via **third-party partners.**

***

### Processing Time

Stablecoin contracts take **longer to set up** than standard ada contracts.

Because this process requires an addendum to be written into your contract to cover the stablecoin conversion terms, and due to the time involved in carrying out the exchange itself, you should expect your contract setup and payment processing to take longer than a standard ada contract. **Please factor this into your planning.** 

***

### Post-Milestone Payments

Once you claim milestone payments in stablecoins, please note that:

* Intersect **will not offer a service to convert your stablecoins back to ada** or any other currency.
* The stablecoins you receive upon milestone completion are your final payment in that form.

***

### Summary FAQ

| **Available stablecoins**                | USDCx or USDM                                                               |
| ---------------------------------------- | --------------------------------------------------------------------------- |
| **Conversion fee**                       | 1% of budget ask                                                            |
| **How fee is applied**                   | Deducted from your budget ask (not added on top like 3% administration fee) |
| **Can you mix stables/ada?**             | No - one per contract                                                       |
| **Can you change after going on-chain?** | No - selection is final                                                     |
| **Exchange rate guaranteed?**            | No - converted at prevailing market rate                                    |
| **Exact stablecoin amount guaranteed?**  | No                                                                          |
| **Who carries out the exchange?**        | Third-party partners                                                        |
| **Will Intersect convert back to ADA?**  | No                                                                          |
| **Is it mandatory?**                     | No - entirely optional                                                      |


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