Circle (NYSE: CRCL) noted that every day trillions of dollars move between businesses. These business-to-business (B2B) transactions underpin everything from “keeping factories running to facilitating digital services, with an estimated ~$88 trillion in B2B transactions in 2024 alone.”
Despite despite their size and importance, the systems that “support these B2B flows remain outdated.”
Circle also mentioned that paper checks, legacy wires, and semi-manual ACH transfers still “dominate.”
The result is mostly a fairly fragmented landscape of “intermediaries, message formats, and approval chains that slow the movement of money and complicate reconciliation.”
The enhancement and transformation of enterprise finance requires resilient and modern infrastructure intended specifically for the internet age. Circle Payments Network (CPN), an initiative undertaken by Circle, represents this shift towards a more open, programmable payment network that connects banks, payment service providers (PSPs), virtual asset service providers (VASPs), and enterprises on “shared, compliance-ready rails that enable always-on, real-time settlement using stablecoins such as USDC and EURC.”
Circle further explained in a blog post that it acts as a bridge between the world of crypto assets and the traditional financial system, “merging blockchain programmability with the ability to meet compliance requirements of regulated financial institutions.”
Circle further noted that in practice, this means “a corporate buyer can, for example, settle with a supplier near-instantly, with programmable rules defining when and how funds move.”
Treasury teams gain full visibility and control, while “counterparties benefit from faster settlement and reduced capital lock-up.”
Circle also mentioned that the end result is a unified B2B payment ecosystem where value moves “as efficiently as data, and business relationships are strengthened by the systems that connect them.”
As noted in the update, Circle Technology Services, LLC (CTS) is the operator of Circle Payments Network (CPN) and “offers products and services to financial institutions that participate in CPN to facilitate their CPN access and integration.”
CPN connects participating financial institutions around the world, with CTS serving as the technology service provider to “participating financial institutions.”
Although CTS does not hold funds or manage accounts on behalf of customers, they effectively “enable the global ecosystem of participating financial institutions to connect directly with each other, communicate securely, and settle directly with each other.”
As clarified in the update from Circle, CTS is “not a party to transactions between participating financial institutions facilitated by CPN who use CPN to execute transactions at their own risk.”
The usage of CPN is currently subject to the CPN Rules as well as “the CPN Participation Agreement between CTS and a participating financial institution.”