As stablecoins move toward broader mainstream adoption, USDC issuer Circle made two announcements this week on the topic. Through a partnership with Sony Block Solutions Lab, a bridged version of USDC will be available on Sony’s new blockchain, Soneium. The Japanese giant has global ambitions for its blockchain. Additionally, residents of Brazil and Mexico can now purchase USDC using local payment rails. This is instead of having to convert the local currency into dollars before purchasing the stablecoin. Circle referenced the commercial payments use case.
The deal with Sony involves locking USDC into the Ethereum blockchain and bridging it to Soneium, a layer-2 blockchain. Sony has big plans for the blockchain and significant intellectual property it can deploy, including that of Sony Music, Sony Pictures (formerly Columbia Pictures), and Sony PlayStation. The company says it wants to “ignite emotions, foster creativity, and meet diverse needs to become mainstream.”
Access to stablecoins in Brazil and Mexico
In the Brazilian and Mexican initiatives, Circle has partnered with local banks to enable local currency conversion. In May, it signed an agreement with BTG Pactual, which it described as its “direct distribution partner” in Brazil. It also said BTG would provide local rail banking capabilities, including access to Pix, the instant payment network.
In late 2023, Circle partnered with another Brazilian partner, Nubank, which also has a presence in Mexico where it has applied for a banking license. It is unclear whether Nubank provides connectivity to SPEI, Mexico’s fastest payment system.
As part of the announcement, Circle outlined the $800 billion in trade between Mexico and the United States and the fact that 95% of Brazil’s cross-border trade is denominated in dollars.
A recent report on stablecoins by Brevan Howard Digital and Castle Island Ventures highlighted numerous examples of Latin American cryptocurrency exchanges and mobile apps where stablecoins were used for cross-border money transfers or as a hedge against volatile exchange rates.
