An exchange rate lock is a time-limited commitment by a provider to honor a quoted conversion rate for a specified payment or exchange if the stated conditions are met.
Stablecoin payment providers can quote the amount of stablecoin required for a fiat-denominated purchase and hold that quote for a short period. The provider bears or manages the market risk during the lock and can specify conditions concerning payment timing, amount, supported network, and transaction confirmation. If the customer pays after the quote expires, a new rate or adjustment can apply.
A rate lock commits the provider to a specified quote for a defined transaction and period. The broader market exchange rate can continue to move during that window.
Rate locks allow merchants and customers to know the required payment amount while the transaction is being initiated and transmitted.
A checkout can quote 100.20 USDC for a CHF-denominated purchase and honor that conversion amount for ten minutes.