NFTs

How Circle Powers NFT Payments with USDC

How Circle Powers NFT Payments with USDC

Alex Behrens Alex Behrens April 22, 2021

Non-fungible tokens (NFTs) are one of the fastest-growing sectors in the crypto ecosystem. NFTs are poised to change the way we interact with content on the internet thanks to their ability to ensure the originality, provenance, and security of unique and scarce items, whether digital or physical.

NFTs are powering new markets and transforming existing ones, including art, gaming collectibles, sports collectibles, music, fantasy sports, and virtual assets. In fact, any traditional market can benefit from NFTs, as they can be used to tokenize any asset with unique characteristics.

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Despite surging popularity, NFTs are still an emerging market with limited access for retail and traditional investors. Many still find it difficult to explore and buy valuable NFTs, since most marketplaces focus on accepting cryptocurrency payments, with support for few if any traditional payment methods like card or bank transfers.

NFTs Lack a Proper Payment Infrastructure

NFT marketplaces are quickly proliferating, with most today focused on crypto art and collectibles. However, many traditional investors, collectors, and fans find it difficult to buy an NFT. 

First, they have to set up a digital wallet like MetaMask and then buy one of the few accepted cryptocurrencies.

Next, there are typically several steps involved in the NFT buying process that can be confusing and expensive; managing gas fees, wallet addresses, and account security just to name a few. Unsurprisingly, traditional investors familiar with paying in US dollars prefer to transact in stable dollar-pegged tokens over volatile cryptocurrencies.

Building a user-oriented payment infrastructure for the NFT market would promote the tokens’ wider adoption among both crypto and traditional investors. An improved user experience in the buying process, such as paying with fiat or with the card, could be a game changer for this emerging sector.

Stablecoins to Drive the NFT Trend

Dollar stablecoins like USDC are becoming the preferred form of currency for NFT marketplaces. Stablecoins helped drive the DeFi ecosystem to billions in volume, and they’re poised to power the NFT sector as well by eliminating currency volatility and ensuring secure transactions on blockchain. NFT users can easily convert their US dollars into dollar stablecoins and rest assured that their funds will not lose value due to crypto market volatility.

USDC is the fastest-growing fully reserved dollar stablecoins backed 1:1 by US dollars held in regulated bank accounts. USDC has several advantages over competitors, making it the stablecoin of choice for Dapper Labs, developers of CryptoKitties and wildly popular NBA Top Shots. Dapper has relied on USDC since 2020, giving NFT buyers the opportunity to pay in a convenient manner missing from many other NFT marketplaces.

Circle Introduces USDC-Based Payment Solution for NFT Market

Circle recently announced an end-to-end payments solution aimed at NFT marketplaces and storefronts. Circle infrastructure allows NFT marketplaces to accept credit and debit cards as well as cryptocurrency payments, providing more options for end-users. Allowing payment through familiar processes help NFT marketplaces attract more traditional and retail investors, and makes it easier for customers to focus on content they love.

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Jeremy Allaire, CEO and co-founder of Circle, explained:

This is not only an important and valuable trend for marketplaces and creators, it represents incredible demand from customers – for collectibles, artwork, moments, and really anything that can be tokenized on the blockchain.”

Circle wants to support creators, NFT platforms, marketplaces, and customers, and Payment Solutions and Digital Dollar Accounts make it simple for developers to quickly go to market to benefit from the mainstream adoption of NFTs.

USDC is at the core of Circle payment solutions. In addition to USDC connectivity that enables fiat on and off-ramps, Circle will soon add support for Bitcoin and Ethereum payments, NFT management services, and yield-generating Circle Accounts for NFT market operations.

By supporting credit and debit card payments, NFT marketplaces and storefronts can ensure an intuitive user experience and simplify the NFT buying process. Customers can deposit funds into their Digital Dollar account and use them to buy NFTs without converting to cryptocurrencies.

Last month, USDC was selected by financial services giant Visa as a new crypto settlement solution, a testament to the reliability of USDC. Visa conducted due diligence when selecting from the multiple stablecoins available on the market, ultimately selecting USDC based on increasing demand among both the crypto community and traditional financial institutions, stability of USDC’s peg to the US dollar, and industry leading security and regulatory compliance.

Circle powers the rise of NFTs with USDC by enabling NFT marketplaces to leverage three main APIs that make processing transactions fast and simple:

  • Payments
    The Payments API allows NFT marketplaces to process payments in USDC, as well as traditional payments rails including cards, wire transfers, and ACH. All payments are settled directly in the Circle Account – no bank account required.
  • Payouts
    The Payouts API enables NFT marketplaces to pay out NFT issuers and sellers from their accumulated USDC balances. The payouts can be conducted in USDC, cryptocurrency, or using traditional banking rails.
  • Accounts
    With Circle’s Account system, NFT marketplaces can provide customer accounts to manage funds in USDC, allowing marketplaces to monitor customer balances, perform accounting, and manage funds routing.

NFTs have already experienced a major boom, but USDC can take your NFT marketplace to the next level by spurring wider adoption. 

Learn more about Simple Payment Solutions for NFT marketplaces from Circle.

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