As the company behind the second most popular stablecoin USD Coin, Circle has rolled out a new API that will allow for the seamless transfer of USDC to USD via automated clearinghouse (ACH) systems.
The first exchange to adopt the new API will be derivatives and futures specialist FTX, seeking for speeding up USD settlement processes on behalf of their customers.
As per a blog entry, Gee Chuang, project manager, described how Circle's ACH API improves connections between the fiat world and the digital world via introducing interoperability among payment rails, like the card, wire, and blockchain transfers. The API allows USD funds to be transferred easily between banks and blockchains with processing traditionally done manually, now automatic.
"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." - @SBF_Alameda
— Jeremy Allaire (@jerallaire) January 26, 2021
The circle has teamed up with Plaid, a company that specializes in online account security and verification, to provide a process for streamlining USD/USDC transfer through Circle. Chaung noted:
"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."
Over 50 countries use some version of ACH payment processing, such as the EU, United States, United Kingdom, China, Japan, and South Korea. The circle has also worked with Visa to process crypto-related payouts across 30 countries covered by their network.
USD Coin is mainly an Ethereum-based token that can be exchanged for US dollars on a 1:1 basis and is supported by a reserve of regular-audited assets. Launched in Oct. 2018 as an alternative to Tether, there are now around 5.4 billion USDC in circulation, leading it to be the second biggest stablecoin in terms of market cap, merely second to USDT.
Demand for USDC has been at an all-time high, hitting weekly volume records during the first three weeks of the new year. Apart from being used heavily at Binance and Coinbase, USDC is also a stablecoin favorite among DeFi traders, as platforms such as Uniswap, Curve, and Compound occupy hundreds of millions in daily trading volume.
USDC for redeemability of $1 at CEXs and holding $1 pegUSDT for liquidity DAI for stablecoin interest-earning I don't use TUSD ever
— DeFi Dad ⟠ defidad.eth (@DeFi_Dad) January 23, 2021
Jeremy Allaire, CEO of Circle, has long been a proponent of integration between the digital currency space and traditional finance, calling for the U.S. Treasury Department in Dec. 2020 to enable crypto industry collaboration in the regulation development process.
Allaire predicted during the speech at a fintech festival earlier that month that upcoming breakthroughs in blockchain technology will encourage massive adoption, putting its potential benefits "in the hands of hundreds of millions, if not billions of users."