Circle, a USDC backer, announced the ACH payment integration, permitting customers to transfer between the USDC stablecoin and US dollars quickly.
Today, Circle announced the addition of Automated Clearing House (ACH) payments for USDC dollar-pegged stablecoins to the Circle API, a set of developer tools created to integrate different products and protocols with the USDC stablecoin. Customers from the US use ACH payments to transfer funds among regulated banking institutions electronically, pay bills and withdraw from their bank accounts.
The new choice will coexist with other ways to send funds to Circle, like card payments and wire transfers. It should allow businesses to more readily accept and convert bank transfers into USDC and vice versa – sending USDC to come as US dollars in customers’ bank accounts.
Fintech firm Circle and Coinbase are partners supporting and controlling USDC, and a cryptocurrency token pegged 1:1 to the US dollar. Compared to the price volatility of other digital assets like Ethereum or Bitcoin, stablecoins are more designed to offer crypto traders a safe-harbor holding similar to cash. However, as this announcement shows, Circle wants USDC to be a feasible option for USD-denominated payments in general.
FTX has already integrated the new ACH service to manage the launch of new cryptocurrency brokerage products. Circle also partnered with Plaid to implement sign-ins with bank credentials instead of account and routing numbers, further easing onboarding for new customers.
“Circle APIs give us a fast, reliable, and trusted infrastructure for connecting customer bank transfers to our new retail products,” FTX founder Sam Bankman-Fried stated in a press release. “And with seamless settlement into USDC across Ethereum and Solana, this gives FTX the ability to offer the fastest possible experience for crypto investors.”
USDC was launched in September 2018, and it has since become the second-most-popular stablecoin. It’s the supply of $5.5B trails only Tether, which has a supply of more than $25B. USDC has seen explosive growth from last year, with supply emerging nearly 700% in 2020.
DeFi has been a motivation for stablecoin demand. These currencies are useful for denominating loans backed by crypto deposits and taking profits after a price spike. DeFi refers to a group of automated blockchain-based protocols designed to offer bank-like services and loans and asset swaps without the use of a centralized authority. Early uses of USDC’s new ACH capabilities will probably come from the crypto realm. However, other businesses can pick up USDC as a transfer option.
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