Stablecoins can already claim that they are way ahead of the curve in the chase for mainstream adoption. PayPal has allowed users in the US and UK to buy, sell, and hold select stablecoins like USDC and USDP, and Visa has conducted pilot programs using USDC as settlement on the Ethereum blockchain.
Now, Circle, the issuer of the popular stablecoin USD Coin (USDC), has announced its plans to introduce tap-and-go payments on Apple iPhones.
This development comes hot on the heels of Apple's decision to open up its Near-Field Communication (NFC) chip and Secure Element to third-party app developers. This means that Web3 developers now have a clear runway to scale blockchain payment frameworks across Apple's platform, perhaps even leveraging blockchain AI in due time.
The implications of this move are far-reaching. It essentially means that iPhone users will soon be able to make seamless, contactless payments using USDC, simply by tapping their phones at NFC-enabled point-of-sale terminals. This could significantly boost the adoption of USDC, and by extension, the Ethereum blockchain on which it is built.
Jeremy Allaire, the CEO of Circle, highlighted the potential for this technology to extend beyond USDC to other use cases, such as NFTs for tickets and certificates.
The global contactless payments market is projected to grow from $7.4 trillion this year to $15.7 trillion by 2029. If USDC can capture even a small fraction of this market, it could lead to a substantial increase in Ethereum's network activity and value.
Apple's opening of its NFC chip to third-party developers could trigger a domino effect within the stablecoin sphere. If USDC's integration proves successful and demonstrates strong user adoption and transaction volume, it could be a compelling proof of concept for other stablecoin issuers like Tether and DAI to jump on the bandwagon and offer users the convenience of expanded payment options.
The move also underscores the growing mainstream acceptance of cryptocurrencies. As major tech companies like Apple embrace blockchain technology, it further legitimises the space and paves the way for wider adoption.
What is USDC, and How Does It Work?
USDC, which stands for USD Coin, is the second-largest stablecoin and maintains a pegged 1:1 value to the U.S. dollar. USDC achieves its relative stability by being backed by reserves of cash and short-term U.S. Treasuries. Essentially, for every USDC in circulation, there is an equivalent U.S. dollar (or its equivalent in assets) held in reserve. This reserve system ensures that USDC holders can redeem their tokens for U.S. dollars at any time.
The reserves backing USDC are held by regulated financial institutions and are subject to regular audits. A significant portion of the reserves are held by Circle Reserve Fund, an SEC-registered money market fund managed by BlackRock.
USDC's issuer is Circle, a financial technology company that operates under regulatory oversight and advocates for regulatory transparency and fast, secure global transactions.
Like its fellow stablecoins, USDC offers a stable store of value, which makes it an attractive option compared to the volatile nature of non-stablecoins like Bitcoin and Ether. There are benefits for users carrying stablecoins, for purposes of quick and cost-effective cross-border payments, and timely swaps for other cryptocurrencies. USDC is also widely used in decentralised finance (DeFi) for lending, borrowing, and trading. Today, it is not uncommon to see companies offering wage payments in stablecoins.
Although occurrences are less commonplace, there is a risk of de-pegging with the U.S. dollar. In 2023, USDC lost its peg and fell below $0.87 when it was found to have kept part of its reserves with collapsed lender Silicon Valley Bank.
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USDC is one of the most widely accepted stablecoins supporting blockchain utility. aelf, a layer 1 AI blockchain, supports USDC for users to participate in activities on specific dApps built on aelf's multi-layered sidechain network with Web3 and AI integration.
For example, users looking to make the transition to Web3 wallets can deposit, send and receive USDC on Portkey, an Account Abstraction wallet that comes with its signature social recovery mechanism for reinforced security. Users can also make quick, direct swaps or create trading pairs using USDC on AwakenSwap, a decentralised exchange on aelf's AI blockchain ecosystem.
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In Other Stablecoin News: Tether Channels Outsized Profits to AI Ambitions
Tether (USDT), the largest stablecoin and third-largest crypto by market capitalisation (approx. $116 Billion), recorded a staggering $5.2 billion in profits in the first half of the year, and $1.3 billion within the second quarter.
Off the back of several catalysts that triggered a renewed bull run, such as the approval of Bitcoin and Ethereum ETFs, Bitcoin's fourth halving, and the Fed's decreasingly hawkish approach to rate hikes, Tether has been a beneficiary of such positive sentiments in the Web3 crypto space.
Mainly, Tether derived profits from its revenue model, which involves earning interest on securities and keeping reserves in short-term U.S government bonds — the latter paid dividends, literally, when the Fed was aggressively hiking interest rates to fight ballooned inflation. Tether also lends some of the USD it receives for issuing USDT tokens.
Tether also revealed $118.5 billion in reserves, and they are the 18th largest holder of U.S treasury bills. The USDT issuer has dedicated part of the profits to further bolster their reserves, rather than to announce generous disbursements to shareholders.
With an influx of cash at hand, Tether has declared an intent to join the AI race, which is concentrated in the hands of a few tech giants, namely Microsoft, Meta, and Google.
The company is launching a new subsidiary, Tether Data, with the ambitious goal of developing open-source, multimodal AI models to champion transparency and privacy in AI model development.
The new subsidiary will focus on three key areas: Developing open-source AI models, integrating AI models into products, and community engagement.
Tether's CEO, Paolo Ardoino, stated that the company is committed to democratising privacy-preserving open AI technology and setting new industry standards for innovation, utility, and transparency. With his venture capitalist hat on, he also brought up another groundbreaking innovation in brain computer interface (BCI), which is crucial in preserving personal privacy.
As a major player in the Web3 crypto industry, Tether's focus on open-source and transparent AI models could influence the development and deployment of AI technologies across various sectors. This is already happening at a rapid pace within the blockchain space, as evident by the proliferation of AI smart contracts, AI crypto coins, and AI layer 1 infrastructure such as aelf.
*Disclaimer: The information provided on this blog does not constitute investment advice, financial advice, trading advice, or any other form of professional advice. aelf makes no guarantees or warranties about the accuracy, completeness, or timeliness of the information on this blog. You should not make any investment decisions based solely on the information provided on this blog. You should always consult with a qualified financial or legal advisor before making any investment decisions.
About aelf
aelf, an AI-enhanced Layer 1 blockchain network, leverages the robust C# programming language for efficiency and scalability across its sophisticated multi-layered architecture. Founded in 2017 with its global hub in Singapore, aelf is a pioneer in the industry, leading Asia in evolving blockchain with state-of-the-art AI integration to ensure an efficient, low-cost, and highly secure platform that is both developer and end-user friendly. Aligned with its progressive vision, aelf is committed to fostering innovation within its ecosystem and advancing Web3 and AI technology adoption.
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