Circle Internet Financial, the issuer of U.S. Dollar Coin (USDC), has launched a suite of blockchain-based compliance products designed to help “companies build onchain while meeting rigorous demands for compliance,” according to a Sept. 24 social media post by Circle CEO Jeremy Allaire.
The platform, called Compliance Engine, includes transaction screening and monitoring tools to identify suspicious transactions and a service specializing in compliance with Know Your Customer (KYC) requirements such as the United States’ Travel Rule, Allaire said.
“We’ve built up tremendous capabilities in this area over the past decade, and we’re now taking those capabilities and exposing them to developers and operations teams that are building financial applications onchain,” Allaire said.
Stablecoin active wallets roughly doubled since 2022. Source: Castle Island Ventures, Brevan Howard Digital
The Compliance Engine adds to Circle’s existing suite of Web3 developer tools — such as its programmable wallet and smart contract platform — all of which center Circle’s core USDC stablecoin product.
It will initially operate on blockchain networks including Avalanche, Ethereum, Polygon PoS, Solana, according to Circle’s website.
The product launch marks Circle’s latest bid to accelerate USDC adoption as the stablecoin competes for market dominance against Tether’s USDT. At approximately $36 billion, USDC’s total market capitalization significantly lags behind that of rival USDT, which exceeds $119 billion, according to CoinMarketCap.
PayPal’s US dollar-backed stablecoin, PYUSD, which launched in 2023, has added to the competition. It crested $1 billion in total market capitalization in August.
Compliance is a crucial focus for Circle, which stands to benefit from accelerating the adoption of tokenized real-world assets (RWAs), including tokenized investment funds.
RWAs could become a multi-trillion dollar market in the coming years, one executive at rival blockchain network Polygon told Cointelegraph in August.
Among the most popular tokenized RWAs are those representing claims on off-chain money market funds, which pay low-risk yield on US dollars and often accept payments in USDC.
The largest by assets under management (AUM) are BlackRock USD Institutional Digital Liquidity Fund (BUIDL) and Franklin OnChain U.S. Government Money Fund (FOBXX), with assets under management of approximately $520 million and $430 million, respectively.
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