Circle Internet Financial Ltd, a leading global financial technology firm, and Genesis, a leading digital asset prime brokerage firm, have formed a strategic partnership to accelerate the adoption and acceptance of digital dollar stablecoins in mainstream finance. The partnership includes a $25 million investment of capital into Circle from Digital Currency Group (DCG), the parent company of Genesis, as well as joint product efforts aimed at enhancing Circle’s new suite of products for businesses and developers with new USD Coin (USDC) yield and lending services.
Momentum and growth for digital dollar stablecoins in 2020 has been enormous, with US dollar stablecoins growing to over 12 billion in circulation, and on-chain transactions from stablecoins now representing the largest category of usage and transactions on blockchains. Recent market forecasts from research firm Messari estimate that on-chain stablecoin transactions are on track to approach $600 billion in volume this year. For perspective, in 2019 total payment volume on PayPal was $712 billion.
USDC in particular has experienced tremendous growth, decisively becoming the fastest growing and most widely adopted fully-reserved and compliant digital dollar stablecoin. USDC in circulation has grown from just over 400 million in early 2020 to over 1.1 billion today. USDC adoption has expanded across trading, payments, savings, lending and other use cases in blockchain finance. Today, hundreds of companies in the blockchain ecosystem have integrated support for USDC in their products and services.
On the back of this growth, Circle launched its new Circle Business Account and Circle API products in Q2 2020. These new services provide businesses, fintechs and other financial institutions with a comprehensive suite of accounts and APIs for integrating and implementing USDC for payments, commerce and financial applications. Customers adopting these services span a broad array of industries and use cases including e-commerce, on-demand delivery marketplaces, digital gaming, internet services, P2P digital wallets, exchanges, B2B payments, neobanks, trade finance and digital asset lending and yield products.
During this same period, Genesis has continued its growth and leadership as the largest crypto asset lending facility in the market, with record volumes of lending across a wide range of institutional customer segments. Genesis originated more than $2 billion in loans in Q1 2020, and has originated more than $8 billion since launching the business in March 2018. As part of this growth, USDC has become one of the most in-demand lending and borrowing assets, as the market seeks to transact and use USDC as a highly reliable payment rail and as preferred treasury asset.
Together, Circle and Genesis will bring to market solutions for businesses and developers who are seeking to generate strong positive yield from their own or customer USDC holdings, and access to USDC-based credit for businesses and merchants that are using USDC for treasury operations and business payments. Alongside this partnership, DCG has provided $25M in strategic capital to Circle, which will be used to accelerate investment and growth behind Circle’s new suite of business accounts and platform services.
“Circle has been a pioneer in the digital currency market, building innovative products and services, and has consistently provided our industry with leadership on technology, standards, and regulatory policy,” said Michael Moro, CEO of Genesis. “With the rapid rise of USDC, we are clearly seeing mainstream momentum for digital currencies, and through this partnership with Circle we believe we can materially advance our shared mission of building a new global financial system.”
“Digital Currency Group has been an incredible leader in the growth of the digital asset market, and Genesis has become one of the most important core providers in crypto finance,” said Jeremy Allaire, Chairman and CEO of Circle. “Combining Circle’s powerful capabilities with USDC payments and platform infrastructure for businesses, with Genesis’s global institutional underwriting capabilities, will allow us to deliver significant value to companies holding and using USDC as part of their business.”
Details and availability of new products and services enabled by this partnership will be announced later this year. On the financing, Financial Technology Partners (“FT Partners”) served as exclusive financial advisor to Circle.