Circle, the company behind the second most popular stablecoin USD Coin, 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, looking to speed up USD settlement processes on behalf of their customers.
In a blog entry, project manager Gee Chuang described how Circle’s ACH API improves connections between the fiat world and the digital world by introducing interoperability among payment rails, such as card, wire and blockchain transfers. Using the API, USD funds can be transferred easily between banks and blockchains with processing traditionally done manually, now automatic.
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 exchanged for US dollars on a 1:1 basis and is backed by a reserve of regularly-audited assets. Launched in Oct. 2018 as an alternative to Tether, there are currently about 5.4 billion USDC in circulation, making it the second biggest stablecoin by market cap, after USDT.
Demand for USDC has been at an all-time high, setting weekly volume records during the first three weeks of the new year. In addition to being used heavily at Binance and Coinbase, USDC is also a stablecoin favorite among DeFi traders, with platforms like Uniswap, Curve and Compound accounting for hundreds of millions in daily trading volume.
Circle CEO Jeremy Allaire has long been a proponent of integration between the digital currency space and traditional finance, appealing to the U.S. Treasury Department in Dec. 2020 to allow crypto industry collaboration in the regulation development process.
Speaking at a fintech festival earlier that month, Allaire predicted 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.”