The new product is currently available for certain clients through an Early Access Program, the Circle team confirmed in a recent blog post.
As mentioned in the update from Circle:
“With Circle Yield, companies can access new, profitable ways to build corporate treasury programs via rapidly growing digital asset lending markets.”
Select clients may take part in the Circle Yield Early Access Program, which is described as a “white-glove” offering developed to provide firms with a seamless way “to deploy capital into crypto yield, powered by USDC.”
As explained in the announcement, Circle Yield is “a uniquely regulated and fully secured yield service available to corporations and financial institutions.”
Although interest rates have declined, cryptocurrency lending markets have witnessed strong growth, with over $35 billion in assets under management (AUM) deployed via CeFi or centralized finance lending markets “as of March 2021,” where crypto lending products are “built and delivered on blockchains through bi-lateral institutional lending arrangements rather than decentralized protocols, or DeFi.”
The update also mentioned that the growth in these markets “presents corporate treasurers and asset managers with a dynamic new asset class, allowing them to diversify their treasury reserves while balancing risk in a well-regulated manner.”
As noted in the announcement:
“Despite this growth, institutional adoption depends on having a well-regulated yield solution. Circle Yield is a powerful new way to get started with crypto lending, offered from one of the most trusted, long-term financial institutions in the digital currency industry.”
As a regulated, “fully secured, overcollateralized” offering backed with Bitcoin collateral, your loan will be “protected throughout its lifetime and as your interest grows,” the Circle team claims while adding that the collateral is “greater than your entire loan balance, segregated with a third-party agent in an omnibus wallet and pledged entirely to the benefit of Circle Yield customers.”
With frequent margin calls for any “fluctuation in underlying collateral value,” the structure of the collateral “reduces operational risk,” the update noted while adding that “combined with competitive rates of up to 8% APY, with loan terms spanning a minimum of one month to 12, Circle Yield offers a new way to safely generate returns on capital.”
Circle Yield is developed completely on USDC, which is currently the fastest-growing dollar digital currency, with more than $23 billion in circulation.
USDC is “widely regarded as the most trusted stablecoin and has seen rapid growth over the past year – it is already used in millions of transactions each day, operating as a regulated, fully reserved stablecoin and examined and attested to each month by leading global public accounting firm Grant Thornton,” the Circle team noted while pointing out that holding assets in USDC allows customers to “move in and out of lending markets with speed and security.”
As mentioned in the update, by becoming a “design partner” in this Early Access Program, you help “bring to life the next phase of Circle Yield, launching later this summer.”
Customers must be “an accredited investor headquartered or registered in the United States or Switzerland to participate at this time,” the announcement clarified.
If you meet these criteria and are interested in this offer, then you may get on the waitlist and sign up for a Circle Account so you can get started.