More digital assets companies are expanding into traditional financial services territory, as evidenced by two recent moves by Circle.
The firm, best known for its USDC stablecoin, revealed plans to explore applying for a bank charter. Gaining a bank charter would allow the crypto company to offer traditional lending products and take deposits.
Circle also recently shared that its most imminent product launch would be the introduction of a cross-border payments network. A source told Cointelegraph that the new network is “initially targeting remittances but is ultimately aiming to rival Mastercard and Visa.”
Unifying a Fractured Landcape
Cross-border payments have been a pain point for years, facing issues like payment delays and high fees due to the lack of a standardized transaction format. Several solutions have been proposed to unify the fractured landscape, including everything from the SWIFT network to Visa and Mastercard’s worldwide rails.
Interestingly, stablecoins like USDC have been considered one of the leading contenders for cross-border payments because their blockchain foundation makes transactions instant and inexpensive.
However, there has been some recent pushback against stablecoins, as all the leading options are based on the U.S. dollar, which detractors argue only serves to further increase the dollar’s dominance.
Circle has yet to share details on its cross-border solution, so it’s unclear if the network is intended to serve as an alternative to its stablecoin and how it will be positioned in an already crowded landscape.
Taking on Financial Services
Despite concerns about the prevalence of stablecoins, their dominance appears to be holding strong. The success of Circle’s stablecoin, now the second-leading option in a trillion-dollar market, has been the catalyst behind both the company’s moves into financial services.
The promise of digital asset technologies like stablecoins, tokenization, and blockchain is a major reason why so many leading financial institutions are heavily investing in what was once considered crypto-related tech.
However, even as mainstream institutions adopt digital assets, crypto companies have begun to take on aspects of conventional financial services. According to the Wall Street Journal, Circle is not alone in its ambitions to expand beyond crypto. Coinbase, BitGo, and Paxos are also considering applying for a banking license.
