Circle, the company behind the USD Coin (USDC) stablecoin, has expanded into Brazil and Mexico, aiming to enhance digital dollar services for businesses in these two key Latin American economies. By integrating national real-time payment systems like PIX in Brazil and SPEI in Mexico, USDC is now accessible through local banks, eliminating the need for expensive and slow international wire transfers.
Businesses in Brazil and Mexico can now purchase USDC directly from their local financial institutions using Brazilian Reais (BRL) or Mexican Pesos (MXN), bypassing the previous requirement to convert their money into USD first. This development offers various advantages, including faster transfer times, avoidance of currency conversion costs, and streamlined international transactions using a recognized digital dollar.
In the context of Latin America, where many transactions are conducted in USD, this expansion is particularly significant. Mexico, a major U.S. trading partner with over $800 billion in trade turnover annually, and Brazil, engaging in around $120 billion in trade with the U.S. every year, stand to benefit from utilizing USDC for settlements to enhance efficiency and reduce costs.
The expansion of USDC as a payment method in Mexico is especially relevant for the remittance market, given that Mexico received more than $63 billion in remittances from the U.S. alone in 2023, equivalent to 3.9% of Mexico’s GDP. Stablecoins like Circle’s USDC offer a cost-effective alternative to traditional remittance methods, with significantly lower fees compared to the standard charges.
This strategic move aligns with Circle’s vision of integrating blockchain finance with traditional financial systems. CEO Jeremy Allaire is optimistic about the future growth potential, foreseeing more banks and payment systems worldwide embracing blockchain technology for its efficiency in internet-based settlements.
Furthermore, Circle’s collaboration with Sony Block Solutions Labs to introduce bridged USDC on Sony’s newly launched Ethereum Layer 2 Soneium platform indicates further innovation in the stablecoin space.