Stablecoin issuers Circle Internet Group and Paxos Trust have piloted a new verification method for stablecoins, reported Bloomberg.
The move, aimed at combating counterfeit tokens and improving transparency, was conducted in collaboration with Bluprynt, a fintech startup led by Georgetown Law School professor Chris Brummer.
The pilot utilised Bluprynt’s cryptography and blockchain technology to enable companies to trace their stablecoin tokens back to the verified issuer.
The move is expected to provide a layer of security in the digital asset market by giving “provenance upfront,” as Brummer explained.
The technology is designed to simplify processes and offer the clarity that regulators and investors require, potentially reducing the risk of financial losses due to fraudulent activities.
Brummer also highlighted the potential benefits of this technology for auditors, financial crime-fighters, and investors.
Paxos issues and operates the blockchain infrastructure supporting PayPal’s stablecoin, PYUSD.
Additionally, Circle formed a partnership with Finastra, a financial software provider, to allow banks to incorporate USDC settlement into their cross-border payment operations.
The collaboration will leverage Finastra’s Global PAYplus (GPP) payment hub solutions, marking the first instance of Finastra’s customers connecting to Circle’s payment infrastructure.
This connection is expected to process over $5tn in daily cross-border transactions, offering banks an alternative to traditional correspondent banking networks.
The integration promises faster settlement times while adhering to existing compliance and foreign exchange processes.
Earlier this month, Circle teamed up with corporate payments company Corpay to bring stablecoin capabilities to Corpay’s cross-border payment services.
This partnership will introduce the flexibility of USDC within Corpay’s infrastructure, providing businesses with access to the benefits of blockchain technology, including 24/7 settlement times.
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