Thursday , September 29, 2022

Stablecoins Join International Relief Efforts As Circle’s Platform Backs Aid Distribution

Stablecoins are coming to international disaster aid with the announcement Thursday that Ireland-based AID:Tech, a 5-year-old financial-services company specializing in relief distribution around the world, will work with Circle Internet Financial LLC to distribute aid via USD Coin, whose value is tied to the U.S. dollar.

“Collaborating with AID:Tech to power the delivery of relief payouts via USDC to people impacted by natural disasters and helping connect underserved individuals to financial means is extraordinarily rewarding,” said Jeremy Allaire, cofounder and chief executive of Boston-based Circle, in a statement. “It’s the application of the mission we set out to accomplish when we started our journey with Circle.”

For its part, AID:Tech sees the new collaboration as a way to streamline aid distribution while working with various parties in a time of stress. “AID:Tech’s work with Circle accelerates our ability to deliver seamless, transparent payments transactions between humanitarian organizations, merchants, and people requiring fast access to funds,” said Joseph Thompson, AID:Tech’s cofounder and chief executive.

AID:Tech is no newcomer to leveraging blockchain finance to secure payments, and the identities of recipients, for relief efforts. According to information released Thursday, the organization in 2015 became the first company to harness the technology to deliver aid from international sources.

Stablecoins could be particularly useful in cross-border relief efforts, as by definition the tokens’ values are linked to those of national currencies, such as the U.S. dollar. This allows the digital currencies to avoid the wild swings in value seen with Bitcoin and other blockchain currencies. Some $25 billion worth of USDC is in circulation, and it has supported some $785 billion in blockchain transactions since its launch in 2018, according to figures from Circle.

AID:Tech’s move to link with Circle’s platform follows Circle’s decision, announced in July, to go public via an acquisition by Concord Acquisition Corp., a special-purpose acquisition corporation (SPAC), in a deal that values Circle at $4.5 billion. The transaction, expected to close by year’s end, would be the second-largest SPAC in the payments business so far, exceeded only by the $9-billion acquisition earlier this year of Paysafe Holdings Ltd. by Foley Trasimene Acquisition II Corp.

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