The partnership, announced Wednesday (Aug. 27), will use Finastra’s payment hub solutions to connect financial institutions to Circle’s payment infrastructure, allowing for settlement in Circle’s USDC stablecoin, even when payment instructions on both sides are still in fiat currency.
“This collaboration is about giving banks the tools they need to innovate in cross-border payments without having to build a standalone payment processing infrastructure,” said Chris Walters, CEO of Finastra. “By connecting Finastra’s payment hub to Circle’s stablecoin infrastructure, we can help our clients access innovative settlement options.”
Jeremy Allaire, Circle’s co-founder, chairman and CEO, added that Finastra’s reach and expertise in powering banks’ payments infrastructure made them the obvious choice to expand USDC settlement in cross-border flows.
“Together, we’re enabling financial institutions to test and launch innovative payment models that combine blockchain technology with the scale and trust of the existing banking system,” Allaire said.
As covered here earlier this week, the rise of stablecoins has been one of this summer’s themes, exemplified by developments like Circle’s initial public offering (IPO), and by efforts by the likes of Walmart and Amazon to launch digital dollars.
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There was also the GENIUS Act, the country’s federal regulatory framework for stablecoins, which became law in July. Put together, these events have turned the season into the “stablecoin summer,” as Goldman Sachs said in a recent report.
“Whether these tokens become the backbone of global commerce or the next subprime crisis remains an open and fiercely debated question,” PYMNTS wrote. “What’s becoming clear, however, is that stablecoins now sit at the intersection of payments, banking and public policy, with implications that stretch beyond cryptocurrency.”
Goldman noted that stablecoins could become a foundational payment and settlement layer, in crypto markets as well as in global commerce, remittances and tokenized financial systems. The economics here are straightforward. A stablecoin is minted when a customer delivers dollars to an issuer, who in turn puts those reserves in safe assets.
“The issuer collects the interest. With hundreds of billions of dollars in circulation and Treasury yields above 4%, that’s a lucrative model,” PYMNTS wrote. “Yet the real business story isn’t about today’s float. It’s about the expansion of tokenization. Tokenized assets (stocks, mortgages, real estate) will inherently create demand for a blockchain-native settlement currency such as stablecoins.”
