Circle wants to help companies access DeFi lending markets with new API

Cryptocurrency company Circle has announced that it plans to launch a new API for companies using Circle accounts to manage crypto assets — and in particular USDC stablecoins. The new API will let companies access decentralized finance (DeFi) protocols starting with Compound lending pools.

Circle is better known as one of the founding members of the Centre consortium with Coinbase. Along with other crypto partners, they have issued USD Coin (USDC), a popular stablecoin.

As the name suggests, stablecoins are cryptocurrencies with a fixed price. One USDC is always worth one USD. Auditing firms regularly check that issuers always keep as many USD in bank accounts as USDC in circulation.

The idea behind USDC is that you can manipulate money more easily. According to USDC backers, moving money from one person to another should be as easy as sending bitcoin from one wallet to another. Circle has its own solution with Circle accounts. Account holders can programmatically send, receive and hold USDC using standard API calls.

In particular, Circle has built ramps to bridge the gap between fiat currencies and cryptocurrencies. With Payments, you can accept card payments, bank transfers and USDC transactions. Everything arrives in your Circle account as USDC. Similarly with Payouts, you can send bank transfers from your Circle account.

Now, Circle also wants to help you access more features with your USDC currently in your Circle account. With the upcoming DeFi API, you’ll be able to access DeFi protocols without having to manually send USDC tokens to another wallet. Circle will start with the Compound protocol.

Compound manages crypto-based lending markets. Some users provide crypto assets and contribute to liquidity pools. Others borrow crypto assets — they first need to provide another type of crypto as collateral.

Users who lend money on Compound are rewarded with interest rates. For instance, when you supply USDC using the Compound protocol, you get 1.74% in annual percentage yield (APY). As USDC is a popular collateral for the Compound protocol, it makes sense that Circle is embracing the protocol with its business accounts. It’s an interesting addition to Circle’s treasury infrastructure.

3/ We've created a new API service that allows companies to automate fiat flows, USDC account flows and direct integration with and custody of yield and governance tokens. Our first protocol launch is Compound Protocol. More to come.

— Jeremy Allaire (@jerallaire) June 24, 2021

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