Circle has launched the Circle Payments Network (CPN) as its issuer for USDC and EURC stablecoins, positioning itself in competition with Ripple's cross-border payment solution. CPN is designed to be an improved, scalable, and regulatory-compliant payment platform that offers greater transparency and adherence to regulations compared to RippleNet.
The Circle Payments Network targets financial institutions, including banks and payment processors, aiming to provide innovative real-time cross-border settlement methods for their extensive networks.
Off-chain orchestration handles payment processing in CPN, with the final settlement on public blockchains such as Ethereum, Solana, and Avalanche. With this setup, payments could be made 24/7 without relying on traditional banking hours and the limitations of SWIFT’s system.
USDC and EURC stablecoins are used as liquidity, providing fast and efficient settlement in the international payments market. Notably, joining CPN is available only to financial institutions that are licensed and regulatorily compliant, so local regulations such as AML and KYC are adhered to.
Unlike Ripple's closed network, CPN's open architecture allows users greater transparency and participation. Circle operates independently from custody and asset management, delivering simplified regulatory compliance protocols to its users. The platform solely provides key infrastructure that enables financial institutions to process cross-border payments more simply. The circles open network approach provides traditional financial institutions with an adaptable solution because they do not depend on Ripple's closed system or XRP token.
Circle’s move to introduce CPN comes as part of its strategy to position the company as a key player in the cross-border payment sector. The platform has attracted more than 20 partnerships with payment providers, including WorldRemit and dLocal, even though both firms had earlier used Ripple's On-Demand Liquidity (ODL) service.
The initial partnerships establish CPN as a substantial competitor operating within the remittance and cross-border payment services against Ripple. The use of stablecoins in CPN is one of the main advantages of the project, as it fixes volatility issues associated with cryptocurrencies. The network also promises programmability, constant availability, and efficient transaction processing.
Specifically, CPN intends to add smart contract capabilities to it in the future and expand its functionality to include native foreign exchange (FX) routing and modular liquidity coordination. The platform's expansion will also guarantee that it is suitable for the growing needs of global payments, as it will provide a more flexible solution for financial institutions.