According to CoinDesk, stablecoin issuer Circle Internet Financial has launched a smart contract codebase called Perimeter Protocol, designed to serve as an open-source foundation for building tokenized credit markets. The company stated in a blog post that Perimeter can support various credit use cases, such as invoice factoring, payroll advances, instant settlement for merchants, and credit trading for institutional investors. The protocol's white paper is publicly available, and developers can freely copy the codebase to build products on top of it.

This release marks the first from Circle Research, the company's new division dedicated to open-source development. The introduction of traditional financial instruments like credit to blockchain-based applications, known as the tokenization of real-world assets (RWA), is gaining traction. Tokenization could disrupt existing financial systems by creating a more efficient and transparent system, according to a Bank of America report. Bernstein predicts that tokenized assets could grow to a $5 trillion market within the next five years.

Stablecoins are essential for settling transactions in blockchain-based lending markets. By facilitating tokenization efforts and the development of decentralized finance (DeFi) credit platforms, Circle could increase the utility of its $26 billion USDC and euro-pegged token EURC. The company said in a blog post that stablecoins and USDC have provided great utility to developers, corporations, end-users, and more across various use cases, including global lending markets within DeFi. However, securely unlocking credit on-chain through safe standards and underwriting remains a significant barrier to entry for new participants in these markets. Institutional DeFi platform OpenTrade's yield-generating tokenized U.S. Treasury pool was the first offering developed using Perimeter.