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The USDC to USD payment rail: The global breakthrough

Lee Cocking
Post by Lee Cocking
March 16, 2023
The USDC to USD payment rail: The global breakthrough

USD Coin ($USDC) is on a mission to “bring the worlds of traditional and digital-native payments even closer together”.

Read on to get an overview of what USDC is, the key use cases it has to offer and how to leverage them within your business in order to find ways to onboard a chunk of the billions of dollars of revenue set to flow through crypto wallets by 2030.

USDC 101

USDC was launched in September 2018, but stable coins came to prominence within the crypto traders space and media following the turmoil that impacted markets in March 2020. With popular examples including Dai ($DAI), and Tether ($USDT), stable coins are typically pegged on a one-to-one basis with a fiat currency, usually the US Dollar. The mechanisms that underpin each stablecoin differ, but fundamentally they aim to provide a counterbalance to the volatility of crypto-native tokens while also keeping holders liquid yet providing cashless transactions.

usdc logo

With multi-billion dollar market cap, USDC is emerging as the favored stable coin for the steady influx of institutional investors and businesses into the space. One reason why is Circle, the issuing entity behind USDC, who is regulated within the US is held to the same standards as household names within Fintech such as Stripe, Apple and PayPal, but Circle’s CEO, Jeremy Allaire, has taken a proactive stance in working with US Congress in the development of broader regulatory frameworks for cryptocurrencies including stable coins.

Amongst the recommendations that Allaire has been putting forward is to reclassify USDC as ‘tokenized cash’. Such a move would recategorize USDC as a cash equivalent, turning it into a ‘low risk asset’ from a regulatory perspective due to its reserves of cash and short-term U.S. treasury bonds.

Combined with its emphasis on regulation, USDC’s Unique Selling Point is its transparency which it leverages to build trust in its proposition that each token is fully backed with fiat dollars by releasing monthly attestations.

From B2B to the remittance market and beyond

Digital assets are likely to be the ‘leveller’ for the global economy in years to come with potential to remove the friction that is inherent in conventional currencies. It’s critical that challenger banks, FinTechs and other businesses are prepared for the 'next generation' of banking products. As usual with any change, the failure of some to prepare for the oncoming demand to process payments via USDC risk losing out to those who do. 

Tapping into the instant connectivity of the internet, transferring in USDC makes sending money around the world more like emailing a PDF than using a remittance company to send a payment. Research by the World Bank found that legacy banks were charging customers an average of 10.3% in 2019. By contrast, those using decentralized networks incur minimal fees, especially since USDC operates on 14 blockchains with some of those having incredibly low gas fees for transactions.

The opportunities for forward-thinking fintechs, businesses and developers to help shape the next phase of the global economy doesn’t stop here. USDC's code, which is maintained by Centre, is increasingly running in the background between and throughout both DeFi and traditional commerce and finance. Adoption will continue to grow as the technology driving Web3 becomes more seamless and more invisible due to increasing embedded finance trends.

Connecting USD to USDC

Circle’s USDC stable coin is forming the basis for a rich set of transformative use cases that are leveraging Web3 technology to unlock global markets in ways never seen before.

At Cybrid, we see USDC playing an important role in the future of finance and embedded finance, which is why we've built our infrastructure to efficiently on ramp USD to USDC and off ramp USDC to USD.

While we have considered a number of USDC’s most prominent use cases, this overview is not exhaustive and additional ones are continually being added – particularly as developers explore the cutting edge of the ecosystem’s Web3 infrastructure.

At the core of the use cases driving USDC’s worldwide expansion are the following features:

      • Faster settlement times.
      • Substantially lower transaction costs.
      • Worldwide access to USD-pegged accounting.
      • A consistent medium of exchange that is anchored across both borders and legacy/web3 stacks.
      • USD coin historical prices have users bullish on its stability!

Don’t miss out on this moment to prepare your business for 24/7, seamless, multi-channel integration in an open global system.

Lee Cocking
Post by Lee Cocking
March 16, 2023
Lee Cocking, the accomplished Head of Product at Cybrid, is a highly-regarded expert in product management and a driving force in the blockchain industry. With his extensive experience and deep understanding of blockchain technology, Lee provides thought leadership and guidance that shape the development of Cybrid's innovative product offerings. In addition to his wealth of product management knowledge, Lee shares valuable insights on the evolving landscape of blockchain and its potential to revolutionize various industries. His expertise and passion for the technology help to ensure that Cybrid remains at the forefront of the market, delivering cutting-edge solutions that address the unique needs of clients in the ever-changing world of digital assets.