Circle will rely on Brazil’s PIX and Mexico’s SPEI payment systems to make settlement processes for foreign trade and domestic transactions.
Circle, the issuer behind the second largest stablecoin USDC, announced that it will integrate its stablecoin with the Argentinian and Mexican national real-time payments networks. With that, participants from the two Latin American countries can access digital dollars—USDC is a dollar-pegged stablecoin—instantly via their national currencies.
The stablecoin issuer explained that local businesses from Argentina and Mexico can access USDC from financial institutions without relying on international wire transfers. That will enable them to reduce the long wait times associated with settlement processes, a major hurdle in accessing dollar-denominated stablecoins.
“Eliminating international wires can drastically reduce the time it takes to access USDC – from days to just minutes, releasing capital trapped in the lengthy settlement processes,” read Circle’s announcement.
Businesses accessing USDC can utilize the token for corporate purposes or allow retail users to get their hands on the asset. And accessing the stablecoin is as simple as exchanging it with the Brazilian Reais (BRL) or the Mexican Peso (MXN), depending on the country. Earlier processes involved exchanging these national currencies for the US Dollar and acquiring USDC via international wire transfers.
Transfers for the stablecoin will occur via the PIX in Brazil and SPEI in Mexico—the payment systems of the respective geographies. These payment systems bring transactional capabilities around the clock, allowing their citizens, businesses, and government agencies to send and receive money using their phone numbers. USDC will now harness the capabilities engendered by these networks.
Circle’s Entry Into the Latin American Markets Will Address Inefficiencies In Foreign Settlement Processes
Circle bringing USDC to these networks is a strategic move, considering the massive trading occurring between Latin America and the US, often facilitated by the Dollar. The USDC infrastructure reduces the burdens observed with cross-border settlements, including long wait times.
Circle stated, “Mexico is among the largest trading partners of the United States, with the countries exchanging more than $800 billion in annual goods and services trade.” It added, “In Brazil, 95% of the country’s $640 billion in annual foreign trade in goods takes place in dollars.” As its stablecoin launches in these countries, it will transform international settlement processes, making foreign trade smoother to witness undoubted usage.
