Hi there. Great questions!
STKs pool already has the funds in local domestic currency, waiting for the POS transaction. The exchange happens after the fact; when we close the channel we take our payments out and exchange them to fiat to replenish the pool of funds.
Let me know if that helps to answer your questions! We've also posted a Medium article that explains some of the backend technology. You can check it out here:
https://medium.com/@STKtoken/how-stk-works-6a504a50d843OK. Let's say I'm in Canada. I want to pay for my coffee with Ethereum using this app.
I do the transaction using the state channel etc.
So behind the scenes, and perhaps happening after the fact by utilising the liquidity pool to speed things up I presume.....
1. The Ethereum is sold for USD?
2. The USD is then exchanged for Canadian dollars?
3. the Canadian dollars are sent to the cafe
Where do these things happen and what are the expected costs?