Circle Soars on Partnership with Fiserv: What It Means for Stablecoins and Investors

Shares of the stablecoin issuer Circle (NYSE: CRCL) traded nearly 8% higher, as of 12:46 p.m. ET today, but had blasted as high as 24% earlier in the day. The move came after Circle announced a strategic partnership with Fiserv.

Bringing stablecoins to traditional banking

Circle issues large stablecoins like USDC and EURC. Stablecoins are digital assets pegged to a commodity or currency. USDC is pegged to the U.S. dollar, while EURC is pegged to the euro. Both stablecoins are pegged on a 1-to-1 basis, meaning that Circle actually has one dollar or one euro to back each stablecoin, so they can easily be redeemed.

The idea of stablecoins is to harness the technology from digital assets that allows people to transfer money instantly over the internet without a bank account, but without the volatility that tends to come with most cryptocurrencies. Fiserv is a leading core processing provider for traditional banks, so it powers a lot of the plumbing that banks need to make daily transactions possible.

Circle and Fiserv announced that they will "jointly explore and develop stablecoin-enabled solutions for financial institutions and merchants within the Fiserv ecosystem."

Jeremy Allaire, chairman and CEO of Circle, said in a statement:

"As demand for real-time, borderless financial experiences accelerates, this collaboration reflects our commitment to supporting forward-thinking financial institutions. Fiserv is a trusted leader in enabling money movement across the financial ecosystem. By integrating with Circle's infrastructure, Fiserv is positioned to extend the benefits of stablecoin-based payments and open internet finance to thousands of financial institutions."

Off to a hot start

If you've followed the crypto story, you know that integrating digital assets into the traditional banking system is viewed as a big catalyst. This partnership with Fiserv could be a big step in that direction and dramatically increase USDC's use.

However, Circle is now up close to 735% since going public earlier this month. The company made about $155 million in 2024 and now has over a $56 billion market cap. I'd probably let this one simmer a bit.

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