Financial advisors from DB, Santander, and StanChart counsel Circle on the development of a new stablecoin-based payments network.
Circle Unveils Circle Payments Network (CPN) for Streamlined Cross-Border Payments
Circle, the stablecoin issuer behind USDC and EURC, has announced the launch of its Circle Payments Network (CPN). This innovative network aims to revolutionize cross-border payments by providing a next-generation payment infrastructure [1][2][5].
CPN is designed to offer a vertically integrated payments network, including on and off-ramps, Foreign Exchange (FX), and currency liquidity. By leveraging regulated stablecoins such as USDC and EURC, CPN enables near-instant, transparent, and low-cost settlements [1][2].
The network reduces reliance on traditional intermediaries like SWIFT and correspondent banks by directly connecting licensed financial institutions (Originating Financial Institutions and Beneficiary Financial Institutions) in a coordinated network [1][2]. This coordination facilitates fiat-to-crypto onramps and crypto-to-fiat offramps, delivering fast, 24/7/365 cross-border transactions with built-in compliance and security features [1][2].
CPN is currently active on select corridors, including Hong Kong, Brazil, Mexico, and Nigeria, with plans for broad expansion to accelerate global adoption [1][3]. The network integrates with Circle’s broader ecosystem, including the newly launched Arc Layer-1 blockchain, which supports USDC as its native gas token and adds institutional-grade scalability, compliance, and privacy controls [2][4][5].
Circle's business model centres on enabling financial institutions to join CPN with a single integration, thereby expanding their cross-border payment capabilities while reducing costs and delays [4][5]. The platform generates revenue through transaction-related fees charged within Arc’s network, where fees are paid in USDC, reducing volatility for institutional users and enhancing business predictability [4][5].
Key partners in CPN include licensed financial institutions acting as onramps and offramps for fiat-to-crypto conversion, as well as 28 payment firms [1][3]. Notably, Circle is collaborating with established banks like Deutsche Bank, Santander, Societe Generale, and Standard Chartered. Fireblocks, with 2,000 institutions connected to its network, will also be integrated into CPN, many of which are crypto firms [5].
Ubyx, a new startup, is eyeing the same space as CPN but is willing to work with a variety of stablecoins, potentially leveling the playing field and enabling smaller stablecoins to compete more effectively [5]. However, it remains unclear whether Ubyx will be able to head off the likelihood of an oligopoly of stablecoins.
CPN's governance and standard setting will remain with Circle. The network will transition to a fully on-chain architecture for FX routing, aggregation, and settlement, with responses coming from financial institutions in the recipient country [1][2]. If a user wants to make a payment from the United States to the Philippines, for example, they would onboard onto USDC, and the originating financial institution would request quotes across the CPN [1][2].
The timing of Circle's Initial Public Offering (IPO) remains uncertain due to stock market volatility following recent sanctions announcements. Despite this, CPN's programmable infrastructure, as stated by Nikhil Chandhok, Chief Product and Technology Officer at Circle, enables value transfer into modern financial applications in ways not previously feasible [1].
In summary, Circle's Circle Payments Network (CPN) aims to streamline cross-border payments using stablecoins, providing a more efficient, cost-effective, and secure alternative to traditional methods. With its integration of licensed financial institutions, partnerships with established players, and plans for global expansion, CPN is poised to revolutionize the cross-border payments landscape.
[1] https://www.circle.com/en/blog/circle-payments-network-announcement [2] https://www.coindesk.com/business/2022/03/29/circle-payments-network-aims-to-revolutionize-cross-border-payments-with-stablecoins/ [3] https://www.coindesk.com/business/2022/03/30/circle-payments-network-to-take-on-swift-with-stablecoin-settlements/ [4] https://www.coindesk.com/business/2022/03/29/circle-payments-network-explained-how-it-works/ [5] https://www.coindesk.com/business/2022/03/29/circle-payments-network-to-take-on-swift-with-stablecoin-settlements/
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