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For our second spring event, we welcomed one of the biggest companies in the stablecoins space: Circle. According to their website, Circle is the Payment and Treasury infrastructure for the internet. They are behind the biggest stablecoin in terms of volume: USDC.
At this event, our guest was Rajdeep Singh Abrol. He is the customer success manager at Circle and he shared his views about the stablecoins, crypto industry, DeFi, NFTs, and the future of circle.
You can watch the whole event on our YouTube channel
To understand stable coins, we must start with fiat currencies. Fiat currencies are issued by the government and these currencies have to value just because it is backed by the authority and the authority says it has value. USD is one such fiat currency
Stablecoins are cryptocurrencies that are most commonly pegged to the US dollar. Even though these currencies experience the same devaluation as their base currency — since they are pegged to it, the main benefit of these tokens is that they can utilize the flexibility and features of cryptocurrencies.
Stablecoins are commonly used to trade other cryptocurrencies, they are non-volatile and thus can function as a good medium of exchange. You can stake these tokens to earn yield, use them for instantaneous payments across borders, lend or borrow, use them as collateral, and more.
There are many ways to create a stable coin, the important thing is to create a system that ensures that the coin would be worth $1 at all times.
USDC is collatoralized i.e. it backed by cash and equivalents and short term US Treasuries. It can thus be redeemed 1:1 for USD.
Rajdeep believes that one-day USDC would be the biggest bank in the world and provide frictionless, cross-border transfer of value, and be functional 24/7. This would be a breakthrough since settlement times of banks are around a few weeks and most are operational only on weekdays.
USDC started as an ERC-20 token on Ethereum but it is becoming multi-chain. This is important since most people envision the future of crypto is an open and interoperable system connected to many on-chain/off-chain networks.
According to Rajdeep, the government should regulate stablecoins for the growth of the industry. This is because many large businesses and small startups would feel comfortable using the technology since it would ensure that it is not against the law and they would have less headache to worry about. This would bring more users to the crypto ecosystem thus growing the whole industry.
According to their website, Circle is a global financial technology firm that enables businesses of all sizes to harness the power of digital currencies and public blockchains for payments, commerce and financial applications worldwide.
Circle provides many APIs for businesses to provide transfers, holding, and exchanging USD. There are 3 main APIs:
Payments API: this provides a way for businesses to use credit cards, international payments, and settle transactions in USDC
Payouts API: provides a way to make global payouts to customers or suppliers and even supports transactions on the blockchain
Accounts API: creates digital wallets for customers and perform cross wallets transfers on many supported blockchains like Ethereum
Circle yield is one of the safest ways to earn guranteed yield on your crypto. Their tressury is overcolateralized and backed by Bitcoin and they offer 1 month to 12 month lockup period with yield ranging from 4.65–6.55%
Compared to other options, in terms of returns, they are better than any traditional institution but fall behind many crypto DeFi platforms. However, circle yield is a much more reliable and safer alternative to most DeFi platforms.
The circle is looking to hire over 700 employees this year. Check out their website if you are interested — https://www.circle.com/en/careers