What happened?
Stablecoin issuer Circle plans to launch the “Circle Payments Network,” enabling financial institutions to use stablecoins for cross-border payment settlements. This payment network will also directly connect financial institutions and technology companies, eliminating the reliance on traditional intermediary banks for processing cross-border payments.
The Circle Payments Network will offer flexible payment options, allowing users to transact in either stablecoins or local currencies, and supports smart contract functionality for automated payment execution.
Circle will ensure that all participating institutions adhere to international compliance standards, particularly anti-money laundering and counter-terrorism financing requirements. Additionally, the network collaborates with several major international banks and works with payment service providers and fintech companies to enhance the market application of stablecoins.
Circle Stablecoin Issuer to Launch “Payment Network”
Stablecoin USDC issuer Circle recently announced that it will officially launch the “Circle Payments Network” in May, aimed at enabling global financial institutions to use stablecoins for real-time cross-border payment settlements. As the second-largest stablecoin issuer globally, Circle aims to expand the application of stablecoins in the traditional financial sector through this initiative.
According to a report by Bloomberg, the first stablecoins supported by the network include USDC and EURC. Moreover, Circle plans to implement a “cross-chain transfer protocol,” allowing this payment network to be compatible with any blockchain used by its member institutions, meaning that regardless of which blockchain these stablecoins are deployed on, they can operate on the same platform.
The Circle Payments Network will directly connect financial institutions and technology companies, eliminating the reliance on the traditional “correspondent bank network” for processing cross-border payments. Traditional cross-border payment systems usually require intermediary banks to complete transactions, while Circle aims to handle payments in a more direct and efficient manner.
How does the Circle Payments Network work? What makes it special?
Circle states that this service will allow senders to initiate payments using either traditional currency or stablecoins, while recipients can choose to receive stablecoins or convert them into local currency.
The flexible payment model allows financial institutions and businesses in different countries to choose the best method according to their needs. Additionally, the Circle Payments Network supports smart contracts, which can automatically execute transactions when specific conditions are met, enhancing transaction automation and efficiency.
The Circle Payments Network will ensure that all participating institutions comply with international standards, especially concerning anti-money laundering (AML) and counter-terrorism financing (CFT). Reports indicate that this network was designed in collaboration with several major international banks, including Banco Santander, Deutsche Bank, Société Générale, and Standard Chartered Bank.
Beyond traditional financial institutions, Circle has also partnered with various fintech companies, such as payment service providers Nuevi, Zepz, dLocal, and Flutterwave, which will assist in the expansion and popularization of the Circle Payments Network.
Circle executive Nikhil Chandhok stated in an interview that Circle’s plan is not merely to promote its own stablecoin products but to foster the growth of the entire stablecoin sector and encourage more diverse stablecoins to enter the market.
Sources: Bloomberg, PYMNTS