Circle Business Account To Aim At Different Kind Of Competitor At The DeFi Ecosystem
Circle Business Account To Aim At Different Kind Of Competitor At The DeFi Ecosystem
November 9, 2020
Circle Business Account To Aim At Different Kind Of Competitor At The DeFi Ecosystem
Circle Business Account To Aim At Different Kind Of Competitor At The DeFi Ecosystem
November 9, 2020

Goldman Sachs-backed payments company Circle Business Account appears to take aim at a different kind of competitor at the decentralized finance (DeFi) ecosystem.

It has been reported that the accounts featured a suite of services designed to help businesses leverage USDC, including APIs that could connect to traditional payment rails, accept dollar-denominated payments as USDC, a USDC wallet service, and access multiple e-commerce marketplaces. 

However, given the yields stablecoins such as USDC can generate in DeFi protocols, account holders would have been incentivized to move their stablecoin funds elsewhere.

According to DeFirate, lending protocols such as Aave and Fulcrum currently yield 3.4% and 11.6% on USDC.

On November 5, 2020, Circle announced new high-yield accounts that may encourage account holders to keep their funds parked in CeFi.

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In a Tweet, Circle announced a waitlist for new interest-bearing business accounts, as their website said that, terms and rates will range between the open-term 8.5% APY accounts, to the 12-month 10.75% APY accounts. 

The report said that the yields will be accrued daily and paid weekly, as opposed to on a monthly or even yearly basis often seen in traditional business accounts. This will bring the accounts closer in line with many DeFi lending protocols, which offer interest in real-time.

The end result is a product that appears to combine the attractive yields and delivery of DeFi interest with the brand-based guarantees of centralized finance. Circle’s offering is just the latest in a wider CeFi-meets-DeFi trend. In August, OKEx and Bitrue announced lending platforms that would blend DeFi and CeFi features. 

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Raoul Milhado, the CEO of Elitium, said that CeFi adopting DeFi features (and vice-versa) would ultimately be a boon for the end-user.

Thus, he added:

“Centralized and decentralized apps can be combined to create new types of economies and to encourage more people to use DeFi […] By combining DeFi and CeFi, we can make the transition from a centralized world to a decentralized world more smoothly and, ultimately, win the age-old battle between DeFi and CeFi.”

Source: Cointelegraph


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Ishita Bora

Ishita Bora is a Senior Content Creator at Digital Notice Media Labs with an experience of 1 year. She has completed her Master's Degree in Language and Linguistics in 2019 from Gauhati University, India. Her interest lies in blockchain technology and cryptocurrency space, as she loves writing about blockchain and other blockchain-related articles. Currently, she is working on blockchain-based news, reviews, featured articles, and guides.