Two former PayPal developers are launching a network that allows the use of stablecoins for a near-instant connection between banks, merchants and payment companies.
Stablecoins tie their value to a government-issued currency, as a hedge against volatility. Six Clovers' Rapid network, which launches Tuesday, will use stablecoins to support domestic and cross-border payments.
Rapid is designed to support existing stablecoins, rather than introduce a new one into the mix.
"We're not pushing our own stablecoin or our own blockchain," said Jim Nguyen, CEO of Six Clovers, an Atlanta-based company he co-founded with Nas Kavian earlier this year. "We consider ourselves to be a payment company that's enabling the instant transfer of funds."
Before Six Clovers, Nguyen held a leadership role at digital asset exchange Okcoin and earlier was head of PayPal's digital business development, leading PayPal's initial foray into cryptocurrencies. Kavian was an architect at PayPal who focused on data security, global payments and cryptocurrency.
Banks and fintechs use Six Clovers' API to connect Rapid to their own payment systems, and use their own funds to obtain a reserve in a coin such as Circle's USDC, which supports near-instant payouts and settlement on the other end. Six Clovers contends it can sustain 46,000 transactions per second and process a payment in about 2.5 seconds.
Six Clovers joins a payment technology market in which blockchain technology is already tackling the challenge of moving funds quickly between nations to support c-commerce transactions and improve supply chain finance.
The
Six Clovers contends the difference is in not using its own token or blockchain, but instead providing SaaS-based connections to the growing market of stablecoins, and eventually central bank digital currencies. While USDC is the primary coin supported at launch, Six Clovers' clients will use the API connection to accommodate a range of digital currencies, which Six Clovers hopes will provide more flexibility.
Six Clovers is launching at the same time as
As commerce becomes more international and digital, there will need to be a range of options working in concert, according to Nguyen.
"The world is fragmented, so there's not going to be one digital currency that will rule them all," Nguyen said. "There will be different dominant options in different areas."
Circle's USDC, the stablecoin Six Clovers is supporting at launch, has grown quickly, reaching 23.2 billion in early June, up from 4 billion at the end of 2020 and 450 million at the end of 2019. But there are also dozens of other stablecoins either in circulation or in the planning stages, such as Tether, DAI and Diem, the planned Facebook-affiliated stablecoin.
Additionally, more than 80% of the world's nations are considering, researching, or testing
Circle's posture is to build with an open source commitment to ensure different payment modes can operate with each other and the stablecoin can thrive in multiple blockchains, said Dante Disparte, chief strategy officer and head of global policy for Circle.
Circle is designed to support multiple blockchains, processing rails and a range of business models for its users, Disparte said, adding the goal is to have transacting in USDC be as simple as simple as sending an email.
"Stablecoins and central bank digital currencies don't exist in a void," Disparte said. "The blockchains aren't standing still."
To expand the use of cross-border payments, banks and fintechs will find themselves increasingly together, according to Bob Dowd, CEO of moneycorp Americas.
"As industry benchmarks adapt towards faster and more efficient solutions, it is only a matter of time before B2B payments turn truly global and digital in nature," Dowd said. "Both sides have exclusive strengths and collaboration is in the best interest of everyone involved."
Collaboration will benefit all parties, Dowd said. "Teaming up means that fintechs can benefit from the prestige that banks enjoy, while banks can take advantage of the data they really need and access new global instant payment infrastructures."
