A forward-thinking treasurer chooses stablecoins
Ramp is a fintech pioneer that was founded in 2019 by Eric Glyman, Karim Atiyeh and Gene Lee on the insight that legacy ways of doing business are no longer good enough. Glyman, Atiyeh and team set out to revamp B2B payments from the ground up, automating a lot of the friction and manual work that can plague legacy systems. They’ve parlayed this commitment to disrupting the status quo into a multibillion dollar valuation, raising more than $620 million to fund their product roadmap and expansion plans.
When finalizing their $300 million Series C capital raise in August 2021, Ramp’s treasury team — led by Finance and Capital Markets Head Alex Song — began exploring alternatives to the traditional corporate treasury playbook that could potentially boost returns without exposing the company to outsize risk. With yields on traditional bank and fixed income rates hovering near historic lows, Song was intrigued by the opportunity of putting a portion of Ramp’s raise to work in stablecoins — or dollar digital currency — and set out to explore the high-growth asset class in greater depth.
Trust, transparency and collaboration
With more than 10 years on Wall Street, Song understood the importance of thoroughly researching any new type of investment before committing funds. A central question was how different dollar digital currencies work? He began studying Circle’s USDC and was impressed by the company’s approach to creating and managing a transparent, stable-value digital asset. USDC is fully backed by cash and short-dated U.S. government obligations, so that it is always redeemable 1:1 for U.S. dollars. Each month, Circle publishes attestation reports by Grant Thornton regarding the reserve balances backing USDC.
After thoroughly evaluating several options, Song chose to invest a portion of Ramp’s treasury into USDC. “USDC was leaps and bounds better than the alternatives,” Song notes. “From a risk/reward perspective, we thought USDC was managed in a way that’s very conservative and transparent.” Song and his team grew convinced that USDC could enable Ramp to do more with its cash.
“Our next steps were clear,” he recalls. “We put together an exhaustive memo outlining the opportunity, risks and risk mitigants and convinced our board to allocate into USDC.” Ramp’s backers include some of the world’s leading venture capital funds, and they’ve since asked Song to talk about USDC to some of their other portfolio companies.
Above-market returns with a CD-like experience
As of November 17, 2022, Circle Yield is not accepting new loans. We are evaluating future updates to the program.
Ramp allocated their USDC investment into Circle Yield*, which shares structural similarities to CDs and traditional fixed income products. It is built on USDC, is fully secured with bitcoin collateral and offers accredited investors a fixed rate and a choice of terms ranging from 1-12 months. The term flexibility can make it especially attractive for venture-stage companies who are growing rapidly. As of February 2022, the minimum investment amount is $100,000. Unlike many other yield-generating crypto investments, Circle Yield is also issued within a clear regulatory framework.
Ramp was also won over by the ease of managing Circle Yield through their free Circle Account, which features a clean, intuitive interface that offers customers a UX that is comparable to leading treasury portals. The Circle Account can help securely store digital assets and offers the ability to see balances in real time and easily roll over investments at maturity.
Ramp’s success is causing other corporate treasurers to take notice. “Dozens of my colleagues have reached out to me about stablecoins,” Song says. “Many companies are thinking about ways to overcome the status quo and get their executive team on board. To see Ramp do it for the first time has opened a lot of eyes to the possibility. I love having these conversations because it helps companies who are new to digital assets understand there is no “one-size-fits-all” approach. Widespread adoption of USDC is a good thing to develop this ecosystem and make it healthier.”
“Our Circle Account gives incredible confidence and control over our investment in Circle Yield. It is easy to use and provides up-to-the-minute status across all of our USDC investments.”
– Alex Song, Head of Finance & Capital Markets, Ramp
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* Offering subject to business approval, geographical availability, and regulatory authorization, and there is no guarantee that the product will become available in a specific timeframe or to a specific customer or geography. Circle Yield product offered through Circle International Bermuda Limited (“Circle Bermuda”). Circle Bermuda has entered into lending arrangements with one or more institutional borrowers, including Genesis Global Capital, LLC**. These borrowers pledge and transfer Bitcoin into custody with a third party custodian as collateral for their USDC borrowings and Circle Yield investors benefit from a security interest in Circle Bermuda’s security interest in the pledged Bitcoin. Not currently available in the following U.S. states: Alaska, New York and Hawaii. Rates are purely indicative and are subject to change pending availability, approval and market conditions.
Circle Account and money transmission services are provided by Circle Internet Financial, LLC. Circle Internet Financial, LLC, NMLS # 1201441, is a licensed provider of money transmission services. A full list of Circle’s licenses can be found at https://www.circle.com/en/legal/us-licenses.
Circle is not a bank; your Circle Account is not a bank account, and any funds are not insured by the Federal Deposit Insurance Corporation, the Securities Investor Protection Corporation or by any US or foreign government agency, insurance fund, person or entity. For investors in the United States, investments described in this communication are offered by Circle Bermuda to “accredited investors” only in accordance with Regulation D, Rule 506(c) of the Securities Action of 1933, as amended. While Circle Bermuda is regulated by the Bermuda Monetary Authority for digital asset business, Circle Bermuda is not engaged in banking and deposit taking activities and is not regulated for these purposes. You should carefully conduct your own investigations and analyses in connection with any participation in this product, including its objectives, risk factors, fees and expenses and the information set forth in these materials. All prospective participants in the products described herein are advised to consult with their legal, accounting and tax advisers regarding any potential participation. Please read the offering documents carefully before you invest. Additional information is available upon request.
**Learn more about Genesis Global Capital, LLC at https://genesistrading.com/.