As a result of advances in both crypto technologies and policy, Circle’s new USDC API offers a bridge between crypto and conventional finance.
Circle, the company behind the second most common stablecoin USD Coin, has introduced a new API that will enable the seamless conversion of USDC to USD through automated clearinghouse (ACH) systems.
The first exchange to implement the new API would be options and futures specialist FTX, seeking to speed up USD settlement procedures on behalf of their clients.
In a blog post, project manager Gee Chuang explained how the Circle ACH API enhances relations between the fiat world and the digital world by adding interoperability between payment rails, such as wallet, wire and blockchain transactions. Using the API, USD funds can be quickly exchanged between banks and blockchains, historically processed manually, and now automatically.
“Circle APIs give us a fast, reliable and trusted infrastructure for connecting bank transfers to our new retail products, and with settlement into USDC across Ethereum and Solana, this gives FTX the ability to offer the fastest experience for crypto investors.”
— Jeremy Allaire (@jerallaire) January 26, 2021
Circle has partnered with Plaid, a company that specializes in online account security and verification, to provide a process for streamlining USD/USDC transfer through Circle. Chaung said:
“This process prevents common errors like mistyping bank accounts or routing numbers and ensures greater user security, while reducing fraud reversal risks. No digging around for numbers, no clunky codes, no switching between applications during the process.”
More than 50 countries use some version of ACH payment processing, including the EU, United States, United Kingdom, China, Japan and South Korea. Circle has also partnered with Visa to process crypto-related payouts across 30 countries covered by their network.
USD Coin is primarily an Ethereum-based token that can be traded for US dollars on a 1:1 basis and is backed by a pool of frequently audited funds. Launched in October 2018 as an option to Tether, around USDC 5.4 billion is currently in circulation, rendering it the second largest stablecoin by market cap after USDT.
Demand for USDC has been at an all-time high, breaking weekly volume highs for the first three weeks of the new year. Besides being heavily used in Binance and Coinbase, USDC is also a stablecoin favorite of DeFi traders, with sites like Uniswap, Curve and Compound responsible for hundreds of millions in daily trading.
What’s the best stable coin option right now?
USDT, DAI, USDC, TUSD?
— Matty (@DCLBlogger) January 23, 2021
Circle CEO Jeremy Allaire has long been a supporter of convergence between digital currencies and conventional finance, speaking to the US. Treasury Department in December 2020 to facilitate crypto sector cooperation in the regulatory growth phase.
Speaking at the fintech festival earlier that month, Allaire forecast that future breakthroughs in blockchain technology will facilitate rapid acceptance, putting its possible advantages “in the hands of hundreds of millions, if not billions, of users.”
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