How Fintechs and Neobanks Can Unleash the Power of Stablecoins

Written by

Jeff Lennox

Senior Director, Enterprise Business Development

Sandra Persing

Vice President, Product and Developer Marketing

Key Takeaways

  • The arrival of blockchains and digital currency makes it possible to embed value directly into the fabric of the internet, giving it the same cost, speed and scale advantages of email, text, video and other types of internet data
  • This is a major breakthrough for fintech builders, who have typically been limited to improving front-end user experiences since payment rails have been closely guarded by legacy intermediaries
  • Dollar digital currencies like Circle’s USDC give developers direct access to open-source dollars that settle nearly instantly and cost effectively to build into their apps and services

Maximizing the potential of financial technology 

Finance and technology have been intertwined for centuries, continually shaping and remaking one another dating back to 1866 when the first transatlantic cable enabled the electronic transmission of value via Morse code.1

While finance and technology steadily developed in tandem throughout the 20th century, the rise of the internet in the 1990s supercharged a new fintech era that is still expanding to this day. Networked computers and mobile devices have helped democratize access to financial information for both institutions and individuals, and security advances gave millions of people – and then billions – sufficient confidence to trust this digital infrastructure with their most sensitive personal details. 

Online banking and brokerage services, digitized institutional trading flows, peer-to-peer payment networks and a range of near-real-time analytical tools are just a few of the breakthroughs that fintech companies have unleashed upon the world over the past few decades.

Despite this significant innovation and progress, we may be just scratching the surface of what fintechs can accomplish, given the last decade’s rise in internet-native currency and enterprise-grade distributed ledgers. 

For all of the speed, ease and convenience fintechs have delivered for the world thus far, most of the innovation has tended to focus on the front-end user experience. That’s because the underlying financial plumbing has been closely guarded by legacy intermediaries and mostly off limits to developers. Until the appearance of blockchains, it was essentially impossible to directly use the internet to transfer value from one party to another. 


Digital currency can reach the unbanked*

*Data from The World Bank


While fintech front-end innovation tends to result in digital, beautiful, elegant, fast, efficient, connected, responsive products designed around users’ needs, the underlying legacy payment rails are analog, expensive and built during an era that predates email. Automated Clearinghouse (ACH), correspondent banking “networks” and card rails simply haven’t kept up with every other facet of our daily lives that have migrated online since these settlement systems were originally introduced.

The arrival of blockchains and digital currency helps to fix this. Together, they are accelerating the convergence of money and the internet. Amid the noise, hype and speculative boom-and-busts, it’s easy to lose sight of blockchains’ central significance and simple truth – they make it possible to embed value directly into the fabric of the internet. 

This major breakthrough means the internet has now become a native commerce rail, enabling fintechs and their customers to bypass the significant costs and friction that legacy payment rails can impose on individuals and institutional users, while reaching nearly 2 billion people around the world who lack access to the banking system yet own an internet-connected device.

The utility of digital dollar infrastructure

USDC is uniquely suited to the needs of fintech builders. It’s essentially an open-source dollar API that developers can easily access and build directly into a wide range of fintech products. Unlike traditional dollars, USDC can reach nearly anyone around the world with an internet connection. 

We think the number of active digital currency users will expand significantly as wallet capabilities continue to improve and more people become aware of what’s possible on this new internet layer. 

This would mirror the trajectory of the original internet, when the appearance of the first browsers in the 1990s gave rise to mass global adoption and a range of killer apps, including search, social and streaming video used today by billions of people.


USDC in action


USDC is a true bearer asset, like cash but in digital form. It enables holders to self-custody and is transferable at the high speed and low cost of the internet. USDC is fully reserved, with the reserve held in segregated accounts for the benefit of USDC holders. By law and regulation, Circle cannot use the USDC reserve for corporate purposes. 

Now let’s take a look at the infrastructure we’re building to make USDC flow seamlessly across the blockchain ecosystem.

Infrastructure designed for fintech builders

While it’s not necessary to understand blockchains or cryptography from an engineer’s perspective, it can be helpful to see where they fit within internet history. Blockchains are just digital ledgers that multiple computers share and maintain to keep track of transaction history. This eliminates the need for a third-party intermediary — typically a bank or clearinghouse — to confirm transactions. 

Blockchains are increasing in number and power, and they are essentially turning into a connected network and forming a brand new financial layer of the internet. “Web3,” as this blockchain-based layer is often called, directly embeds both money and ownership claims on “real-world” assets to be represented on the internet via unique — or non-fungible — digital identifiers. 

This combination — non-fungible “tokens” that represent real-world assets, paired alongside stablecoins like USDC — could open up a world where almost anyone, anywhere, can use dollars to buy, sell, finance and trade almost anything at any time.

USDC is already live on many smart-contract enabled blockchains, including Ethereum, with additional programmable blockchain integrations planned.  We plan to make USDC available wherever developers are active and the right security is in place, so that it can be used widely across the blockchain ecosystem.

As our Chief Product Officer Nikhil Chandhok points out, open-source composability is central to both the ethos and practical application of Web3 technology. Not only are native-USDC blockchains programmable, but a new world of open-source financial “primitives” are emerging that fintech builders can endlessly access, share, configure, arrange and combine to create new financial services that run just on code. More of these primitives are appearing every day. 

USDC is designed as an incredibly useful manifestation of this concept. It is itself one of these open-source primitives, and is already being built into many open-source, smart-contract-based financial marketplaces and payments services on the blockchain today. 

Behind the scenes, as Circle Chief Technology Officer Li Fan explains, we are also making more of the blockchain complexity fade into the background. No two blockchains are alike, and each presents valid reasons and attractions for companies and developers. Our Cross-Chain Transfer Protocol (CCTP) helps eliminate friction when sending USDC across the blockchains that are supported. This makes USDC interoperable across multiple networks and gives fintechs greater choice for building apps that their users can then access without worrying about silos.

See how CCTP lets you swap USDC across supported blockchains in 3 easy steps   

How fintechs & neobanks can use USDC

We are still early in the digital currency era. The uses for dollar digital currency are practically limitless, and the bulk of them likely haven’t even been invented. Here are some of the ways that fintechs are putting this infrastructure to use today.  

  • Remittances

Global remittances were projected to top $630 billion in 2022.2 Around 800 million people – 1 in 9 people globally – receive funds remitted home by migrant workers.3 Fintechs can partner with Circle to enable remittance customers to send dollars back home without the costs and delays of traditional cross-border transactions. USDC can be sent across borders nearly instantly and cost effectively. 

  • Dollarization

Inflation is on the rise globally, driving many people outside the US to want access to dollars. Circle can help you enable your customers to send, spend and store dollars alongside – or instead of – volatile or depreciating local currencies. Additionally, people in high-inflation countries are often prevented from accessing dollars through the banking system. Fintechs can instead offer their customers dollars via the internet.

  • Access to new financial services

USDC is an easy access point to decentralized finance (DeFi), a new class of lending, borrowing and trading venues that run on the blockchain. DeFi markets operate entirely on software and code instead of traditional financial intermediaries, often making them faster and cheaper than traditional financial services. The largest DeFi venues frequently handle tens of billions of dollars in monthly volume.

What Circle offers

Circle Mint – Eligible fintechs can access USDC directly from us through Circle Mint. This corporate treasury portal-like experience is home for minting and redemption, and is also the home base for APIs that fintechs can use to accept digital currency payments, make near-instant payouts with USDC and automate transactions for increased efficiency.

Programmable wallets – Our programmable wallets provide a comprehensive developer solution to storing, sending and spending USDC and other digital currencies, along with non-fungible tokens (NFTs). Asset custody can be managed either by fintech providers or their users. Available via API and Mobile SDK, our wallets enable fintechs to embed these capabilities into existing apps, where they can choose to manage private keys and how they’re used, or empower their users with full control via user-controlled wallets. 

Developer sandbox – Experiment in a safe environment that functions just like production. Test integrations and API calls without performing real financial transactions. Create code that easily converts into a production version by switching out URLs and API keys. Investigate new workflows or refactor existing applications to minimize bugs and optimize user experience. Confirm products and services work as expected before going live.


It’s time to build

Digital currency and blockchains represent one of the biggest breakthroughs – and opportunities – in the history of financial technology. Working with Circle and USDC can position your business to take advantage of this transformative infrastructure. Our team would love to hear from you and help you get up and running.

Written by

Jeff Lennox

Senior Director, Enterprise Business Development


Sandra Persing

Vice President, Product and Developer Marketing


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