Circle links up with Genesis Global Trading to advance USDC services, nets $25M in funding from Digital Currency Group

Quick Take

  • Circle is partnering with Digital Currency Group subsidiary Genesis Global Trading to build out its USDC yield and lending services
  • The partnership includes a $25 million investment from DCG
  • The partnership comes as USDC crossed the one billion mark in supply earlier this month

The token supply for USDC hit one billion at the start of July, and Circle — one of the startups behind the U.S.-dollar tied stablecoin — is partnering with Digital Currency Group (DCG) subsidiary Genesis Global Trading on a product development initiative in a bid to further the token's growth and use.

As part of the arrangement, DCG is investing $25 million in Circle, and the product partnership will focus on Circle's USDC yield and lending services. DCG is an existing investor in Circle. 

Circle has long touted the use-cases of its dollar-pegged USDC, which span decentralized finance, derivatives trading and e-commerce payments. Jeremy Allaire, CEO of Circle, said Genesis Global Trading has been a leading force in the development of the crypto lending space, and a partnership with the company will aid Circle in building out products and services for firms in the burgeoning corner of the crypto market.

Trading firms can use USDC to move more quickly between crypto assets, and users of both centralized and decentralized lending platforms can earn a yield on their USDC holdings. 

"I think the really critical thing here is that the rapid growth and evolution in USDC borrowing and lending, which is really key," said Allaire. "And that's accelerated right alongside the nearly two hundred percent growth in USDC circulation that's happened over the last six months as well."

Earlier this year,  the Boston-based firm announced Circle Business Account, a toolbox of APIs to allow developers to build on top of USDC.

USDC supply has seen a 125% increase year-to-date, and has jumped 162% in the past six months, according to Coin Metrics. 

Still, the market is competitive. USDC still faces rivals ranging from crypto native players like Tether, which commands the most market share, as well as newcomers like Facebook's Libra, which plans to roll-out a number of fiat-tied stablecoins this year. 

Allaire said the further backing of Genesis and DCG could help galvanize players across crypto as well as fintech around USDC as a standard. 

"USDC we think of — it's a protocol, it's a standard, it's a market infrastructure. Circle itself is in the business of providing these kind of in platform service capabilities to businesses," he said. "We expect that a lot of businesses that build on that are going to want to be able to tap into what are these emerging capital markets that exist around USDC as well."

Circle — which once was valued above $3 billion — pivoted to focus exclusively on the development of USDC at the end of 2020. The firm previously operated a cryptocurrency exchange and over-the-counter trading desk, which oversaw the trading of billions of dollars worth of crypto assets in 2018. It sold off both of those assets in 2019. 

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