Circle to use Stellar-based USDC for new standard of internet money

  • According to Circle CEO Jeremy Alaire, the Stellar-based USDC will hanlde any functions within the Circle account.
  • A cost-effective and scalable USDC is one of Centre Consortium’s main goals in 2021.

Within the XLM community, the launch of the USD Coin (USDC), the second largest stablecoin by market cap, on the Stellar blockchain is arguably the most eagerly anticipated event at the moment. As CNF recently reported, the Stellar Development Foundation (SDF) has announced the launch for February 2021. The deployment could open up extensive new use cases for the Stellar ecosystem.

However, the focus is primarily on the partnership of the SDF with the Centre Consortium, which was co-founded by Circle and Coinbase. In this regard, a Twitter user asked Jeremy Alaire, co-founder & CEO of Circle, what “key features USDC” will have on Stellar. While the latter did not reveal what percentage of USDC will be spent on Stellar or what the fees will be for a USDC transaction on Stellar, Alaire did provide another interesting answer.

The use case scenarios of the Stellar-based USDC

Alaire outlined the many possibilities related to the Stellar-based USDC with the Circle account. Basically, the Circle CEO said that USDC on Stellar can handle any functions within the Circle account. Alaire wrote:

Businesses will be able to convert/redeem/send/receive USDC on Stellar via Circle Accounts; developers will have access to a suite of APIs for using Stellar as account and payments infrastructure, including comprehensive fiat rails (cards, ACH, wires), and also cross-chain swaps.

Basically, anything you can do with a Circle Account or Circle APIs, you will be able to do with USDC for Stellar.

The Circle account is a full-stack solution designed to “replace the fragmented banking system.” As Circle also explains, it is designed to be a “new standard for money on the Internet.” Users can send and receive their funds globally through the account payments, as well as “streamline their treasury operations – all with a set of powerful APIs built on USDC.”

According to Circle, each USDC is backed by cash and short-term U.S. government bonds, not reserve commercial bank money. Holding funds in USDC is thus intended to give companies “a safe haven in uncertain times.” The reserves are managed by the Centre Consortium and audited by global accounting firm Grant Thornton LLP.

Cost-effective and scalable USDC

As announced in October 2020, the issuance of USDC on Stellar is part of CENTRE’s diversification strategy. CENTRE aims to make USDC less dependent on the Ethereum blockchain. Because of this, the consortium has partnered to also issue USDC on Algorand and Solana as part of their multichain USDC strategy. Along these lines, Alaire tweeted a few days ago:

Low-cost, scalable USDC growing fast: 

Eth/EVM Layer 2 @maticnetwork > 33M USDC

Algorand USDC-ASA > 30M USDC

Solana USDC-SPL > 45M USDC

Growing fast, this will be a much bigger part of the growth in 2021 as users flock to speed and cost efficiency. More chains/layer2 coming.

About Author

Jake Simmons has been a crypto enthusiast since 2016, and since hearing about Bitcoin and blockchain technology, he's been involved with the subject every day. Beyond cryptocurrencies, Jake studied computer science and worked for 2 years for a startup in the blockchain sector. At CNF he is responsible for technical issues. His goal is to make the world aware of cryptocurrencies in a simple and understandable way.

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