Expanding its presence in Latin America, Circle, a stablecoin issuer, has announced the availability of USD coin (USDC) in Mexico and Brazil. This strategic move comes as Circle partners with Brazil’s PIX and Mexico’s SPEI, real-time payment systems, to facilitate local bank transfers. By leveraging these systems, businesses can now access USDC in just minutes, streamlining the otherwise lengthy settlement processes associated with international wires.
The introduction of USDC in Mexico and Brazil is a game-changer for businesses in the region, offering low-cost cross-border payment solutions. Latin America, a hotbed for e-commerce growth with retail sales projected to hit approximately $138 billion by 2024, has traditionally struggled with cross-border transactions dominated by the U.S. dollar and the euro in nearly 80% of all transactions. The arrival of USDC could revolutionize this dynamic by providing a more efficient and cost-effective alternative.
Low-Cost Cross-Border Payments
Mexico and Brazil are key trading partners with the United States, with trade volumes exceeding hundreds of billions of dollars annually. While stable fiat currencies like USD offer stability, they also come with higher transaction costs and currency risks. In this context, stablecoins like USDC present a more affordable alternative, saving businesses substantial time and money in the conversion process.
Circle enables businesses in Brazil and Mexico to directly convert their local currencies, Brazilian Reais (BRL) and Mexican Pesos (MXN), into USDC at competitive rates. This direct conversion eliminates the need for a separate conversion to USD, simplifying transactions and reducing associated costs.
USDC: A Growing Force in the Stablecoin Market
Since its inception in 2018, USDC has experienced substantial growth, facilitating over $12 trillion in blockchain transactions. The stablecoin has expanded to operate on 15 different blockchain networks, demonstrating its versatility and interoperability within the crypto ecosystem. Circle’s relentless efforts in enhancing USDC’s utility have positioned it as a formidable player in the stablecoin market.
Moreover, Circle recently received regulatory approval under the European Union’s Markets in crypto-Assets (MiCA) framework, solidifying USDC’s compliance with new regulations and regulatory bodies. With a market capitalization of $35.25 billion as of September 18, USDC continues to gain momentum in the stablecoin market, albeit trailing behind Tether (USDT) which boasts a market cap of $118.7 billion.