Circle Launches Perimeter Protocol: A Game-Changer for Tokenized Credit Markets

By 0xGorki 09/29/23 3:44 PM

Circle Internet Financial, a leading stablecoin issuer, has unveiled Perimeter Protocol, a smart contract codebase set to revolutionize tokenized credit markets. This open-source foundation promises to usher in a new era of financial innovation by enabling a wide range of credit use cases, from invoice factoring to payroll advances and institutional credit trading. Circle Research, an initiative aimed at fostering technical innovation in the crypto, blockchain, and Web3 realms, is at the forefront of this exciting development.

Circle’s Commitment to Open Source R&D

At the core of Circle’s ethos lies a strong belief in the power of shared knowledge to drive progress. The Circle Research team is unwaveringly committed to open-source principles, ensuring that their cutting-edge research is accessible to the global community. This dedication to collaboration and transparency is aimed at contributing to the public good, enhancing security standards, and accelerating innovation within the crypto, blockchain, and Web3 ecosystems.

Applied Research and Experimentation

Circle, a prominent leader in the blockchain technology space, brings a wealth of experience and a history of excellence to the table. Circle Research leverages this legacy while infusing it with fresh perspectives to tackle complex challenges, emerging as a potent force in the world of open-source research and development.

The Unveiling of Perimeter Protocol

The star of the show in this announcement is undeniably Perimeter Protocol, Circle Research’s inaugural open-source contribution. This innovative protocol sets a new standard for facilitating credit on the internet. Built on open standards, Perimeter Protocol comprises a set of smart contracts designed to enable the secure and seamless exchange of capital over public networks.

Circle’s journey into the realm of sound money on the internet began with the introduction of USDC and later EURC stablecoins. These digital currencies have demonstrated their utility across a diverse range of use cases, particularly within the decentralized finance (DeFi) sector. However, for newcomers looking to participate in these markets, unlocking credit on-chain via safe underwriting and standards represents a formidable barrier to entry.

To break down this barrier, Circle has released the Perimeter white paper and a public GitHub repository. With Perimeter Protocol, the company aims to provide a solution for bringing real-world assets and un- or under-collateralized loans into a protocol that is offered as a public good. This move promises to democratize access to credit in the digital age.

A Flexible Solution for Diverse Use Cases

Perimeter Protocol is not a one-size-fits-all solution; instead, it is designed to be highly adaptable. It can accommodate a wide range of credit use cases, from small and medium-sized businesses seeking invoice factoring to institutional investors exploring crypto credit for trading opportunities. Additionally, it offers global payroll advances and instant settlement capabilities as part of merchant processing, further expanding its versatility.

In the words of Rachel Mayer, VP of Product at Circle, “Defi protocols have pioneered how open networks using stablecoins bring value and financial inclusion to anyone with a wallet and internet connection. Transparent flow of funds and smart contracts enacting ‘code is law’ bring improved efficiency, automation, speed, and scale relative to traditional financial markets due to programmable infrastructure and digital asset 24/7 rails.”

Dave Sutter, CEO at OpenTrade, also recognizes the potential of Perimeter Protocol, stating, “OpenTrade is a technological, legal, and operational bridge between traditional financial markets and the digital asset markets. Circle Research’s Perimeter Protocol has proven to be a key technological foundation for building a secure, scalable, and composable platform that can support such a journey.”

As Circle Internet Financial continues to push the boundaries of innovation in the cryptocurrency and blockchain space, the launch of Perimeter Protocol represents a significant milestone. This open-source initiative has the potential to transform the way credit is accessed and utilized in the digital age, paving the way for greater financial inclusion and empowerment across the globe.

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