In early 2025, Circle’s “Digital Dollar on the Value Internet—2025 USDC Market Economy Report“ outlined three narratives for USDC: (1) the financial upgrade of the internet; (2) interconnecting networks through USDC; and (3) expanding USDC’s use cases via network effects.

For Circle, which now holds a 26% market share in the stablecoin sector, the first two narratives are no longer sufficient. The newly launched Circle Payments Network represents its move, as a globally compliant stablecoin issuer, to capture the value of USDC—and stablecoins more broadly—within the global network.

The U.S. dollar and the internet both inherently possess strong network effects. In both the physical world and the internet, the dollar functions as a currency with powerful network effects. Blockchain technology endows USDC with greater functionalities and new application potentials beyond those of traditional dollars, while still relying on the traditional internet for real-world deployment.

Circle is building an open technology platform centered around USDC, leveraging the U.S. dollar’s dominance and broad adoption to deliver network effects and utility for financial services, benefiting from the scale, speed, and cost advantages of the internet.

Circle Payments Network is Circle’s compliant infrastructure that brings together financial institutions offering USDC services into a unified, seamless, and programmable framework to coordinate global payments involving fiat currencies, USDC, and other payment stablecoins.

As a result, fiat currencies will no longer need to circulate through the outdated SWIFT system, and blockchain-based digital dollars will become the new settlement rails.

At its core, Circle’s blockchain-settlement-based payments network serves as a funeral invitation to traditional channels like SWIFT, VISA, and Mastercard—ushering us into a monumental transformation, akin to the shift from postal mail to email, from horse-drawn carriages to electric trams, and from transatlantic telegraph cables to blockchain internet value transmission.

(Web3 Payments In-Depth Report: Industry Giants Launch Full-Scale Offensive, Poised to Reshape the Current Crypto Market Landscape)

An important point is Circle’s positioning of the Circle Payments Network: a new protocol layer built on a comprehensive, open, internet-based settlement system, with stablecoins at its core. This positioning allows it to be compatible with various settlement-layer blockchains, rather than getting caught in the battle for dominance over financial infrastructure among public chains.

Dr. Xiao Feng from HashKey, starting from the essence of finance, defined public blockchains as the next-generation financial infrastructure—not merely incremental improvements to the existing system, but disruptive innovations across trading, clearing, and settlement, creating a new financial paradigm.

Notably, what Circle aims to build is an open blockchain-based network that already shows the early contours of a VISA-like network. We may find hints about its future evolution by looking at VISA’s development history. This stands in sharp contrast to the relatively closed networks of Ripple & RippleNet and Stripe & Bridge.

In October 2023, while giving a Web3 payments talk at Ant Group, I was already contemplating whether onboarding fiat assets onto blockchains and settling via stablecoins would be a better solution. Evidently, a year and a half later, Circle has provided a clear answer and strong use cases.

Thus, this article compiles and translates Circle’s Circle Payments Network Whitepaper, exploring its design principles, real-world use cases, future potential applications and growth opportunities, as well as its governance model, which resembles that of the VISA network.

1. Whitepaper Overview

Stablecoins have long been seen as having the potential to become the foundation for payments and capital flows on the internet. However, until recently, stablecoins—as digital cash—have primarily been used in the global digital asset markets and decentralized finance (DeFi) sectors.

With the launch of the Circle Payments Network (CPN), Circle is advancing stablecoins one step further, unlocking their potential to upgrade the global payment system—similar to how past internet innovation eras transformed industries like media, commerce, software, and communications. These sweeping changes greatly improved customer experiences, reduced costs, increased speeds, and fueled global economic growth for individuals and businesses.

To realize this potential, the Circle Payments Network (CPN) serves as infrastructure designed to overcome many of the barriers that have so far limited stablecoin adoption in mainstream payments. These obstacles include access barriers, unclear compliance requirements, technical complexities, and concerns about the secure storage of digital cash.

The Circle Payments Network (CPN) brings financial institutions together under a compliant, seamless, and programmable framework to coordinate global payments involving fiat currencies, USDC, and other payment stablecoins.

Corporate and individual customers of these financial institutions can access faster and more cost-effective payment services compared to traditional systems, which are often constrained by fragmented networks or closed ecosystems. Critically, the Circle Payments Network (CPN) lays the foundation for the entire ecosystem as infrastructure, eliminating much of the technical complexity and operational barriers that have so far hindered mainstream stablecoin adoption, such as the need for businesses to self-custody stablecoins. The Circle Payments Network (CPN) also paves the way for breakthroughs in programmable money, unlocking new use cases for money in global value exchange.

This whitepaper outlines the design principles of the Circle Payments Network (CPN), details its initial and near-term use cases, and presents future potential applications and growth opportunities. It aims to help financial institutions, payment companies, application developers, innovators, and other stakeholders understand their roles in building and leveraging the Circle Payments Network (CPN)—and how the network can empower them to innovate and deliver the benefits of stablecoins to their customers.

2. Introduction

2.1 Flaws in the Global Financial Payment System

Today’s global economy is more interconnected than ever before, yet unlike other economic sectors, the infrastructure supporting capital movement still largely relies on frameworks developed before the internet era.

In the past, it was impossible to offer a “Money Protocol” capable of transferring value in a fully native digital form over the internet.

Systems like the U.S. Automated Clearing House (ACH) and other similar protocols became core parts of the fragmented global payment landscape after their emergence in the early 1970s. Although recent developments such as the Eurozone’s Single Euro Payments Area (SEPA), Brazil’s PIX, and India’s Unified Payments Interface (UPI) have improved domestic transaction speeds, they still lack a global interoperable standard and worldwide scale. They also fail to leverage the openness and scalability of programmable money built on open blockchain networks.

Businesses and individuals worldwide bear heavy costs for relying on this traditional payment infrastructure. According to McKinsey’s “Global Payments in 2024” report, the global payment industry generates over $2.4 trillion in annual revenue, most of which comes from fees charged to senders and receivers—reflecting the complexity and intermediation of the traditional infrastructure, effectively acting as a tax on global businesses and households.

Today, international wire transfers can cost up to $50 per transaction, with intermediaries along the payment path often adding extra fees. According to World Bank data, the global average cost to send $200 stood at 6.65% in Q2 2024. Additionally, foreign exchange conversion introduces further challenges, bringing expensive forex fees and price volatility.

The fragmented settlement processes within the correspondent banking system continue to impose significant economic burdens on businesses and society. Importers and buyers often wait days for payments to clear, weakening their cash flow and complicating liquidity planning. Exporters and sellers face unpredictable multi-day settlement windows, forcing them to rely more heavily on expensive short-term working capital loans to maintain operations. Recipients who depend on cross-border remittances for food, shelter, and other essentials risk having a significant portion of their income eroded by traditional intermediaries while also enduring payment delays—and in some cases, they may have to handle cash in crime-prone environments, adding further risk.

（Digital Dollar on the Value Internet - 2025 USDC Market Economic Report）

2.2 The Transformation Has Arrived

Change has long been overdue. Although the internet has nearly transformed every aspect of global commerce over the past decades, the movement of capital still relies on fragmented traditional networks that lack transparency, efficiency, and innovation. While some countries have successfully implemented national real-time payment systems, these solutions cannot scale globally and offer limited accessibility for developers.

Since the emergence of early payment messaging and settlement systems like ACH half a century ago, global communication technology has advanced to the point where people around the world can now connect instantly. Today, billions of people can watch movies on their phones while riding the subway, access the entirety of human knowledge instantly at almost no cost, and buy or sell nearly any product from around the world.

It is now time to adopt a new way of moving money globally—one that operates 24/7, connects seamlessly, and is designed to eliminate the inefficiencies of traditional payment systems while building upon and integrating the solid foundations of the traditional financial system.

(Digital Dollars on the Value Internet — 2025 USDC Market Economy Report)

2.3 Internet-Native Monetary Settlement Layer — Circle Payments Network

With the launch of Circle Payments Network (CPN), this vision is becoming reality. Circle Payments Network (CPN) is a brand-new protocol layer, built on a comprehensive, open, and internet-based settlement system, centered around USDC, EURC, and future regulated payment stablecoins. By connecting global-scale open platforms and reducing intermediaries, CPN enables the movement of funds in ways that traditional closed networks cannot achieve.

Importantly, CPN does not directly transfer funds; instead, it acts as a marketplace for financial institutions and serves as a coordination protocol to facilitate the seamless flow of global funds and information exchange.

CPN represents the first combination of regulated settlement assets (in the form of stablecoins) with a coordination and governance layer specifically designed for financial institutions. This integration connects traditional payment systems with assets like USDC and EURC, while establishing a trusted counterparty framework to enable more efficient, less intermediated global settlement.

By introducing a compliance-based, 24/7-operating new “Clearing Layer” of digital dollars, CPN lays the foundation for internet-scale cross-border settlement.

（https://x.com/circle/status/1914411337683480654）

2.4 Benefits of Circle Payments Network

A. Internet Financial Payment Services

CPN will benefit billions of people and tens of millions of businesses, enabling them to access funds and financial services just as they access other transformative global internet services. Payers can choose to initiate payments using either fiat or stablecoins, while recipients (whether businesses or individuals) can choose to retain stablecoins or convert them into local currency upon receipt. CPN will make near-instant, borderless payments a widespread reality.

The launch of CPN makes it easier to imagine a future where international suppliers can receive cross-border payments almost instantly and at low cost through a modern, compliance-first platform supporting global supply chains; small merchants can accept payments nearly in real time without heavy fees eroding their margins; global sellers can directly access new markets; content creators can receive micro-payments from consumers, leveraging the cost efficiency of stablecoins; and remittance recipients can capture a greater share of remitted funds, enhancing purchasing power where it is needed most.

B. Reducing Technical Complexity

Beyond serving as an upgrade to many of today’s inter-institutional payment networks, which are often burdened by legacy infrastructure, closed ecosystems, and slow or costly settlements, CPN is designed as a modern, stablecoin- and blockchain-based orchestration layer to achieve scale.

While blockchain-based payments have gained some traction, they are not inherently frictionless or trusted—especially in inter-institutional settings where settlement assurance, reversibility, compliance, standardized protocols, and strong security are essential. CPN further reduces technical complexity and minimizes the operational and financial hurdles that have so far impeded stablecoins from entering mainstream payments and commerce, paving the way for a more efficient, inclusive, innovative, and transparent financial ecosystem.

C. Cost Reduction and Efficiency Gains

From a cost and efficiency standpoint, CPN is a powerful alternative to traditional cross-border payments. While there are costs associated with purchasing stablecoins and converting them back into fiat, these “on/off-ramps” are becoming less expensive in many markets outside the U.S. and can be lower than acquiring dollars through banks.

Traditional dollar transfers can be expensive and slow for both senders and recipients, increasing reliance on short-term working capital financing (as mentioned earlier). By enabling near-instant settlement and reducing dependence on intermediaries, CPN can unlock significant cost efficiencies.

Furthermore, as an open platform, CPN has the potential to foster a competitive market for on/off-ramps, foreign exchange, and other services, further lowering costs and improving access.

D. Transparency, Security, and Scalability

CPN is a transparent, secure, and scalable infrastructure designed to help financial institutions better serve their business and consumer clients. Crucially, CPN will unlock these efficiencies without sacrificing compliance. Circle has established a robust governance framework for CPN, requiring participating financial institutions to meet global anti-money laundering, counter-terrorist financing (AML/CFT), and economic sanctions standards.

E. Open Infrastructure Driving Innovation

Importantly, CPN does not directly transfer funds; instead, it acts as a marketplace for financial institutions and serves as a coordination protocol to facilitate seamless global fund flows and information exchange. As the network operator, Circle defines the CPN protocol and provides APIs, developer SDKs, and public smart contracts to coordinate global fund flows.

The growth and success of CPN will not be limited to Circle’s ecosystem but will also rely on participants beyond Circle to collectively unlock economic value. This network will create fertile ground for banks, payment companies, on/off-ramp providers, app developers, and other regulated stablecoin issuers to innovate together, delivering greater value and better experiences to their own customers.

Built on open public blockchain infrastructure, CPN and regulated payment stablecoins offer builders a powerful foundation to launch on-chain applications that move funds seamlessly across these networks.

CPN provides innovators and builders with modular components to develop new user experiences and support a wide range of payment use cases. Over time, builders will be able to create a vibrant ecosystem of modules and application services atop CPN—building a third-party functionality marketplace for CPN participants and end-users, while unlocking a new and powerful distribution platform for fintech developers.

3. Circle’s Vision

Through the Circle Payments Network (CPN), Circle is building a new platform and network ecosystem that creates value for every stakeholder in the global economy, helping accelerate the benefits of this internet-based new financial system for society:

Businesses:

Importers, exporters, merchants, and large enterprises can leverage CPN-enabled financial institutions to eliminate significant costs and friction, strengthen global supply chains, optimize cash management operations, and reduce reliance on expensive short-term working capital financing.

Individuals:

Remittance senders and recipients, content creators, and others who frequently send or receive small payments will gain greater value. Financial institutions using CPN can deliver these enhanced services faster, cheaper, and more simply.

Ecosystem Builders:

Banks, payment companies, and other providers can leverage CPN’s platform services to develop innovative payment use cases, utilizing the programmability of stablecoins, SDKs (software development kits), and smart contracts to create a thriving ecosystem. Over time, this will fully unlock the potential of stablecoin payments for businesses and individuals. Additionally, third-party developers and businesses can introduce value-added services to further expand the network’s capabilities.

All participants and end users of the CPN network will benefit from an open and continuously upgradable funds movement infrastructure, which not only lowers the cost and increases the speed of cross-border payments but also ensures the technological readiness of the internet financial system.

（www.circle.com/cpn）

4. Use Cases

The Circle Payments Network (CPN) is designed to enable seamless, efficient, and secure transactions using regulated stablecoins on supported blockchain networks, thereby supporting a wide range of payment and value transfer use cases.

Its compliance-oriented architecture allows originating financial institutions (OFIs) to discover and connect with beneficiary financial institutions (BFIs) through CPN, while also empowering ecosystem builders to develop innovative solutions for individuals, businesses, and institutions.

（www.circle.com/cpn）

4.1 Business Payments

A. Supplier Payments

By shortening settlement times and eliminating intermediaries, cross-border payments between companies are accelerated and simplified.

A manufacturing company based in Mexico needs to make a payment to a steel supplier in Germany but wants to avoid high foreign exchange fees and several days of bank transfers. The company’s originating financial institution (OFI) exchanges Mexican pesos (MXN) for USDC and uses CPN to connect with the beneficiary financial institution (BFI) in Germany. The BFI then seamlessly converts the USDC into euros and settles the payment to the supplier’s account instantly.

B. Retail Payments

Enhancing global online commerce through secure, efficient, and flexible payment options.

A fashion retailer based in Brazil sells goods to a customer in the United States. The retailer’s BFI connects with an OFI through CPN to receive the payment in US dollars. The OFI converts the dollars into USDC and sends it to the BFI, which then seamlessly exchanges the USDC into Brazilian reais (BRL), or holds it as USDC with a digital asset custodian on behalf of the retailer. The retailer receives funds instantly, with faster settlement times compared to traditional payment processors, and has the option to keep the working capital as digital dollars.

C. Trade Finance

Simplifying and securing international trade payments.

A textile importer in the United States places an order with a manufacturer in India, aiming to reduce the time and cost of traditional trade financing. The importer’s OFI converts US dollars (USD) into USDC and connects with a BFI in India through CPN to transfer funds. The BFI manages the USDC escrow through a smart contract, and after verifying the shipment documents, settles the payment in Indian rupees (INR) to the manufacturer. This method achieves faster settlement, reduces counterparty risk, and leverages the innovation of smart contracts for escrow services.

D. Payroll and Salary Disbursements

Enabling businesses to process global salary payments with minimal fees and instant settlement.

A multinational company pays salaries to remote employees in multiple countries. Instead of relying on traditional banking channels, the company converts local currencies into USDC through its OFI and uses multiple BFIs discovered via CPN to instantly disburse salaries to employees. These BFIs receive USDC from the OFI and complete the final payment in the local currency of each employee.

E. Artificial Intelligence Payments (AI Payments)

In the future, CPN will support autonomous AI agents to send and receive payments on behalf of users or systems, enabling real-time value exchange.

A logistics company uses AI agents to make cross-border freight service bookings. When the agent selects a service provider in Singapore, it uses an OFI integrated with CPN to convert USD into USDC and automatically sends the payment to a BFI in Singapore, which then converts it into Singapore dollars (SGD). The entire payment process is executed programmatically via a smart contract, minimizing manual intervention and enabling intelligent cross-border machine-to-machine payments.

4.2 Consumer Payments

A. Remittances

Empowering individuals with fast and cost-effective remittance services, avoiding high fees and delays.

A user residing in the United States wishes to send money to their family in the Philippines. The remittance company, acting as the OFI in the U.S., converts USD into USDC and simultaneously uses CPN to dynamically discover a local BFI in the Philippines, which converts USDC to Philippine Pesos (PHP), delivering funds to the family almost in real-time, with fees being only a small fraction of traditional remittance fees.

B. Subscriptions

Supporting regular payments for digital services with programmable stablecoin billing.

A digital media platform offers premium subscription services to users worldwide. Each month, the users’ digital wallets initiate a USDC payment through the originating financial institution (OFI), which is routed through a platform BFI discovered via CPN. The BFI receives the funds and either holds them as USDC with a digital asset custodian on behalf of the media platform or converts them into local fiat currency as required, crediting the media platform’s account.

C. Micropayments and Content Monetization

Supporting instant, low-cost micropayments for content creators and digital services.

A content creator in Brazil receives small donations from global fans via CPN, using a local OFI and supported BFIs. Fans can send stablecoins instantly without long delays or high platform fees, enabling fast and low-cost monetization.

D. E-commerce

Expanding consumer access to global online markets with a fast payment experience.

A customer in the UK purchases electronic products from a seller in South Korea via an international e-commerce platform. During checkout, the customer makes a payment in GBP through a local OFI, which converts the funds into USDC and transfers it to a BFI in South Korea. The BFI converts the USDC into Korean Won (KRW) and deposits it into the seller’s account.

4.3 Institutional Payments

A. Capital Markets Settlement

Enabling faster and more transparent settlements between financial institutions, reducing counterparty risk and operational costs, thus enhancing trading efficiency.

A U.S. asset management firm executes an over-the-counter (OTC) bond trade with a European investment bank but wishes to avoid the T+2 settlement delay, as well as the resulting capital inefficiencies and counterparty risk. The asset management firm’s originating financial institution (OFI) converts USD into USDC and uses CPN to connect with the European beneficiary financial institution (BFI) to transfer the USDC. The BFI then immediately settles the transaction in euros (EUR) with the investment bank.

B. Foreign Exchange (FX)

Improving the efficiency of multi-currency operations, simplifying currency exchange, and addressing the high foreign exchange rates, multi-currency management complexities, and delays traditionally associated with providers.

A European investment firm wishes to fund a real estate acquisition in Japan but wants to avoid high foreign exchange fees and delays. The investment firm’s OFI converts euros (EUR) into EURC, which is seamlessly exchanged for Japanese yen (JPY) on a competitive FX venue via CPN after being received by the BFI in Japan, settling the transaction immediately.

C. Treasury Services

Efficiently converting overseas earnings back to the home market, simplifying fund repatriation.

A U.S.-based enterprise software provider offers cloud-based solutions to businesses across Southeast Asia. To repatriate the region’s income to the U.S., the company’s beneficiary financial institution (BFI) in the U.S. discovers a local originating financial institution (OFI) in the Philippines via CPN. The OFI collects payments in Philippine pesos (PHP) from business clients, converts them into USDC, and transfers them to the U.S. BFI. The BFI then converts the USDC into USD and deposits it into the company’s treasury account, facilitating faster and compliant global income consolidation.

D. Government and Humanitarian Payments

Providing secure, reliable, and efficient channels for large-scale payments, from disaster relief funds to institutional transfers.

An international NGO uses stablecoins to distribute disaster relief funds. The NGO initiates the payment through its originating financial institution (OFI), which converts local currency into USDC and transfers it to the beneficiary financial institution (BFI) operating in the affected region. The BFI either directly delivers the funds to beneficiaries’ digital wallets or converts the USDC into local currency and deposits it into their bank accounts, ensuring transparency, accelerating fund delivery, and enhancing accountability for aid distribution.

E. Decentralized Financial Integrations (DeFi Integrations)

Supporting DeFi innovators by providing the foundation for lending, borrowing, savings, and more, unlocking the potential of mainstream on-chain finance.

A properly licensed and regulated DeFi lending platform integrates USDC and EURC to offer loan and savings products. With the infrastructure provided by CPN, the platform facilitates seamless cross-border transactions, reduces volatility, and supports compliant institutional customer flows while building trust among a diverse user base.

5. CPN Ecosystem Stakeholders and Roles

The CPN ecosystem is composed of ecosystem stakeholders and participants who play a crucial role in facilitating global payments, driving technological innovation, and advancing network governance, economic value creation, and network adoption.

5.1 CPN Governance Body

Circle serves as the primary governance and standards-setting body for CPN, as well as the network operator.

Circle’s main responsibilities include:

• Establishing and maintaining the “Circle Payments Network Rules” (“CPN Rules”), which govern the qualifications, operations, and compliance of all participants.

• Developing and maintaining core infrastructure—smart contracts, APIs, and SDKs—to enable seamless payment settlements (sending/receiving transactions) across blockchain networks.

• Operating coordination protocols for member and price discovery, payment routing, and settlement between counterparties.

• Promoting standardized and automated information sharing among members to ensure compliance with the Travel Rule.

• Verifying the qualifications of financial institutions, approving their participation in the network, and issuing certificates confirming compliance with CPN standards regarding licensing, anti-money laundering (AML), counter-financing of terrorism (CFT), sanctions compliance, and financial strength.

• Supervising members’ compliance with regulatory requirements (including AML/CFT and sanctions) through continuous risk-based reviews.

• Planning and managing network security, incident response, and infrastructure to ensure operational integrity and resilience.

• Introducing pre-approved third-party service providers and modular applications that meet CPN’s compliance, security, and performance standards.

5.2 CPN Members

Members, also known as Participating Financial Institutions (PFIs), are the cornerstone of CPN. They act as counterparties, initiating, facilitating, or receiving payments within the network and executing transactions according to CPN rules and governance standards.

PFIs include Virtual Asset Service Providers (VASPs), traditional and crypto-native Payment Service Providers (PSPs), and financial institutions such as traditional or digital banks. Depending on their role in the transaction, PFIs may act as Originating Financial Institutions (OFIs), initiating payments on behalf of the sender, or as Beneficiary Financial Institutions (BFIs), receiving stablecoin payments and facilitating final fiat payments through local payment systems, or providing stablecoin custody services on behalf of the receiver.

The core responsibilities of CPN members include:

• Maintaining appropriate licenses and ensuring continued compliance with all relevant regulations in applicable jurisdictions, including Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) and sanctions requirements, while adhering to CPN rules.

• Participating in Circle’s qualification process and keeping legal entity information, compliance status, jurisdictional scope, and risk profile up to date.

• Conducting risk-based assessments of counterparties and transactions based on their compliance obligations and information collected and oversight executed through CPN.

• Executing payments in accordance with the technical services and protocols outlined in CPN rules, depending on their role as an OFI or BFI.

• Complying with CPN’s technical and infrastructure requirements, including secure integration, Service Level Agreement (SLA) performance, transaction monitoring, and data protection protocols.

• Sharing necessary sender and beneficiary information as required by CPN’s Travel Rule compliance framework, Request for Information (RFIs), and other supervisory requests.

• Monitoring transactions to detect and report suspicious activities in accordance with applicable regulations.

• Engaging in CPN governance through structured feedback, operational reviews, and member reputation ratings to enhance transparency and support continuous improvement.

• Providing timely support and solutions to other members or end-users regarding network-related inquiries.

• Using CPN’s developer SDK, regulated stablecoins, and smart contract infrastructure to develop and deliver innovative payment use cases.

5.3 CPN End Users (Businesses and Individuals)

End users are the ultimate initiators and beneficiaries of payment transactions—although they do not interact directly with CPN, they benefit from lower costs, faster settlement, greater transparency, and ongoing innovation. The sender initiates the payment through the Originating Financial Institution (OFI), while the beneficiary receives the payment through the Beneficiary Financial Institution (BFI).

5.4 CPN Service Providers

These entities include both financial institutions (FIs) and non-financial institutions (non-FIs) that provide value-added technological solutions and financial services to CPN members and end users.

They include:

• Liquidity Providers and Forex Platforms: These entities provide efficient market-making, price discovery, and currency exchange services for stablecoin transactions within CPN. They provide liquidity for cross-border stablecoin settlements and ensure competitive foreign exchange rates.

• Stablecoin Issuers: These institutions issue regulated payment stablecoins, which serve as the primary medium of exchange within CPN. Stablecoin issuers ensure transparent reserves, regulatory compliance, and underlying fiat liquidity to support seamless cross-border transactions.

• Technology Solution and Financial Service Providers: These service providers offer a range of services to CPN members, including fraud and risk management, wallet infrastructure, custodial solutions, billing and invoicing, as well as compliance and transaction monitoring solutions to support their business and operational needs.

（www.circle.com/cpn）

6. CPN Governance, Qualification and Network Operations

CPN operates within a collaborative and transparent governance framework aimed at prioritizing compliance, security, and trust within the network. This framework covers three key aspects of governance:

• Qualification Review and Oversight: Circle, as the primary governing body, is responsible for setting strict qualification standards, which are detailed in the “Circle Payments Network Rules,” and promoting the integration of regulated payment stablecoins into the network.

• Network Functions and Operations: Core functions support seamless and compliant transactions while ensuring operational rigor and continuous improvement.

• Transparency and Stakeholder Engagement: By actively interacting with a diverse range of stakeholders, including financial institutions, regulators, enterprises, and builders, CPN aligns with global standards to enhance trust, accelerate adoption, and foster sustainable network ecosystem growth.

Network Operation:

• Only legally authorized financial institutions are permitted.

• Mandatory anti-money laundering (AML), counter-financing of terrorism (CFT), and sanctions compliance.

• Secure transaction data sharing, including the Travel Rule.

• Continuous auditing and oversight.

6.1 Qualification Review and Oversight

The governance framework of CPN defines qualification standards, certification protocols, and the integration of regulated stablecoins to ensure the credible participation of financial institutions, regulated stablecoin issuers, and service providers within the network.

A. Strict Qualification Standards

Members must meet comprehensive qualification requirements before gaining network access. This includes holding all necessary licenses, implementing anti-money laundering (AML) programs and sanctions measures consistent with local regulations and global standards, maintaining reasonable security controls, and demonstrating sufficient financial strength. As the network operator, Circle assesses all potential members before granting access and periodically reassesses them based on risk. Members licensed under sound regulatory frameworks established by international compliance bodies, such as the Financial Action Task Force (FATF), will undergo standard reviews, while other members may be subject to more in-depth evaluations. The qualification standards are publicly available, and Circle’s assessments may serve as input for members’ own counterparty due diligence processes.

B. Member Certification and Access

After successful qualification verification and approval, CPN issues a unique network certification to qualified members. These certifications allow counterparties to securely identify each other and retrieve counterparty information, facilitating transparency, enabling informed risk assessments, and improving the efficiency of counterparty due diligence. The certification includes a set of clearly defined attributes—such as membership status, jurisdictional scope, and qualification information—that are continuously monitored and updated to reflect changes in the risk landscape.

C. Integration of Regulated Payment Stablecoins

The governance framework of CPN outlines a structured evaluation and approval process for integrating new regulated payment stablecoins into CPN. Potential stablecoins must undergo rigorous assessments based on CPN’s strict qualification standards, including regulatory compliance, transparent reserves and audit proofs, availability of banking payment channels, underlying fiat liquidity, risk management standards, information and network security capabilities, and reporting practices. Only stablecoins that fully meet these standards and receive approval from the governance body can operate within the network, ensuring that they contribute to a stable, secure, and efficient network ecosystem.

6.2 Network Functionality and Operations

CPN operates through a robust framework that enables members to conduct secure, real-time transactions, ensuring consistency, scalability, and resilience. This framework includes transaction coordination, operational support, incident response, and infrastructure management.

A. Transaction Coordination and Risk Management

Transactions within CPN are coordinated through a series of technical services and protocols, ensuring seamless execution among participating members. Additionally, network members leverage automated alerts provided by CPN and conduct regular risk assessments to continuously monitor transaction flows, focusing on transaction anomalies and partner performance, such as evaluating failed transaction rates and service level agreement (SLA) violations. These measures proactively mitigate operational risks, helping maintain the reliability and efficiency of the network.

B. Member Operational Support

CPN provides clear operational guidelines, including service level agreements (SLAs) defined within the CPN rules, which outline expectations for uptime, transaction speed, dispute resolution, and timely information sharing. The network also standardizes the exchange of transaction and counterparty data, simplifying operations by reducing the need for customized coordination.

C. Incident and Crisis Management

CPN has established detailed protocols for managing security incidents, regulatory compliance issues, and system outages. These protocols include predefined communication channels with members and transparent, fair resolution processes, ensuring rapid response and effective management of disputes, whether compliance-related or transaction-related.

D. Infrastructure Scalability and Planning

CPN’s infrastructure is continuously monitored using observability tools that track throughput, latency, and error rates. Automated performance monitoring and regular load testing enable the network to scale according to demand. Circle collaborates with vetted infrastructure and cloud partners to ensure resilient configurations for computing and storage resources. Scalability reviews and corridor-level stress tests validate the network’s readiness for increased transaction volumes and network expansion.

6.3 Transparency and Stakeholder Engagement

CPN’s governance is built on transparency, which helps foster trust and confidence among all participants. As the governing body, Circle, under the advice of the advisory committee, takes strategic recommendations to strengthen the governance framework. CPN regularly conducts surveys, focus groups, and structured reviews to gather feedback from members and assess service quality. These inputs drive continuous improvement and help ensure the network’s development meets the needs of participants. Independent audits and regular public reports on transaction volumes, system uptime, and member compliance further reinforce operational integrity and accountability.

Representatives of CPN members and end users, as well as interactions with regulators, play a crucial role in the network’s development. CPN encourages its members to actively participate in the formulation of network rules and technical standards, providing valuable advice and operational insights that help shape the network’s strategy and growth. Additionally, Circle’s financial services department maintains ongoing interactions with global regulators, leveraging a strong track record to ensure CPN aligns with international standards—especially those related to anti-money laundering (AML), counter-financing of terrorism (CFT), and the Financial Action Task Force (FATF) Travel Rule—and operates in a secure, trusted, and compliant environment.

7. CPN Core Services

CPN, designed specifically for stablecoins, serves as a coordination protocol that enables seamless, compliant, and programmable global transactions.

CPN leverages public blockchain networks for final settlement while optimizing payment coordination, compliance-related data exchange, and smart routing between stablecoins and network members. Stablecoins are the fundamental digital asset class within CPN, providing the stability, interoperability, and programmability needed for high-trust financial applications.

At launch, the network supports USDC and EURC, with plans to expand to other regulated payment stablecoins that meet CPN’s strict governance and eligibility standards. Over time, CPN will serve as a foundation for developers to create interoperable modules and application services that will extend the network’s utility and unlock new use cases for global payments and financial innovation.

7.1 Payments Through Smart Coordination

CPN’s payment protocol is built on a hybrid architecture that combines off-chain and on-chain systems, helping aggregate liquidity and facilitate price discovery among network members. As more payment stablecoins are added to the network, CPN will evolve into an on-chain forex routing infrastructure, enabling efficient and immediate exchanges between stablecoins while still coordinating transaction settlements between Originating Financial Institutions (OFIs) and Beneficiary Financial Institutions (BFIs).

In the initial version of CPN, coordination occurs through an off-chain API system that generates transaction requests. OFIs sign these requests to initiate the transfer of USDC or EURC to the designated BFI wallet. At this stage, Circle (as the network operator and governance body) broadcasts the transaction to the appropriate blockchain. This process validates the payment details, ensuring that the correct amount and tokens are delivered to the BFI and that all relevant fees are covered within the agreed settlement time.

Subsequently, CPN will transition to a smart contract protocol architecture, enhancing the network’s composability and introducing more efficient, value-added features. The CPN smart contract payment protocol is designed to enable seamless on-chain payments between members using stablecoins (including USDC and EURC). By leveraging smart contracts, the protocol will minimize transaction errors, automate reconciliation, and efficiently collect fees while maintaining a non-custodial design.

Under this protocol, OFIs initiate payments through smart contracts deployed on public blockchain networks supported by CPN. The contract verifies key transaction parameters (such as token type, amount, recipient address, and deadline) before executing the payment. Unlike traditional transfers that are error-prone and require separate invoices for transaction fees, smart contracts enforce precise payments and efficiently route transactions to different BFIs in cases involving multiple bids and quotes.

To enhance transparency and security, each transaction is uniquely identified and timestamped, ensuring clear auditability for compliance and reconciliation purposes. Additionally, the protocol will include an optional “undo” feature in the future, allowing the sender to cancel erroneous transactions within a brief window before final confirmation.

（www.circle.com/cpn）

7.2 Optimizing Forex (FX) with Smart Discovery and Routing

CPN enables participating Originating Financial Institutions (OFIs) to discover Beneficiary Financial Institutions (BFIs) and send stablecoins for payment settlement. During the discovery process, CPN allows OFIs to query the network for specific stablecoin or fiat currency pairs. This system enables OFIs to discover network participants and request corresponding exchange rates and liquidity. Initially, the platform integrates USDC and EURC with local fiat currency liquidity order books and private liquidity sources. Over time, the system will transition to a fully on-chain forex (FX) routing, aggregation, and settlement architecture—providing direct access to on-chain FX pools, order books, and private liquidity.

The network’s discovery capabilities will include order routing, while the Request-for-Quote (RFQ) system will further optimize FX execution to meet the performance standards of traditional payment systems.

Although the network initially focuses on discovering liquidity between BFIs, it will gradually expand to include on-chain venues on the whitelist—such as Automated Market Makers (AMMs), on-chain order books, and other liquidity providers—to broaden access to stablecoin liquidity. Once discovered, CPN will intelligently match orders from these sources, enabling direct stablecoin FX conversions, with built-in security measures and transparent execution, coordinated by Circle as the network operator.

7.3 Cross-Chain Seamless Settlement Payments

CPN supports native settlement of stablecoins across multiple blockchains, providing a seamless cross-chain payment transfer mechanism. Participating Financial Institutions (PFIs) bring their preferred blockchains into the network, while CPN coordinates transactions between the selected source and target blockchains to enable efficient payment settlements. With Circle’s Cross-Chain Transfer Protocol (CCTP version 2), CPN facilitates fast and secure cross-chain transfers for allowed stablecoins, ensuring that transactions maintain speed and integrity across blockchain networks. Initially, the platform will support a limited number of blockchains at launch, with plans to expand to more blockchains based on the preferences of network members in the future.

7.4 Selective Transparency to Protect Confidentiality

CPN will introduce advanced confidentiality-enhancing features on public blockchains to protect transaction data and help members fulfill privacy and operational obligations. These mechanisms allow users to designate certain transactions as confidential, ensuring that sensitive payment information is not permanently displayed on the public blockchain. This capability supports a wide range of use cases, enabling businesses to maintain confidentiality for critical activities, such as corporate payments, trade finance, and payroll, via CPN.

Additionally, CPN will adopt a confidentiality protocol (which will be defined separately and is not included in this white paper) for selective disclosure. Under this protocol, transaction details will only be visible to authorized parties—such as counterparties, law enforcement agencies, regulators, and auditors—when required for compliance or legal purposes.

7.5 Expanding Capabilities through Composability and Trustworthy Interoperability

To extend the value of the network ecosystem, CPN allows pre-approved third-party protocols to integrate and interoperate with its core infrastructure, enhancing the practicality and versatility of its payment capabilities. Circle envisions a range of diverse integrations—including lending and credit, liquidity aggregation, institutional yields, custody, subscription services, and more. Participation is restricted to protocols that have been whitelisted, audited, and rigorously reviewed by Circle, with compliance to strict regulatory standards, security protocols, and liquidity management practices. Through this composable architecture, CPN aims to unlock a secure, programmable foundation and third-party ecosystem for global payments, financial services, and technology-driven solutions.

8. CPN Economic Model

The economic model and incentive mechanisms of CPN are designed to drive early rapid adoption while establishing a sustainable long-term revenue strategy for all network participants. It aligns incentives among all network members, end users, builders, and service providers to promote network growth and sustainability.

Transactions processed through CPN generate three main fees:

1. Payout Fees: Compensate Beneficiary Financial Institutions (BFIs) for local fiat payments and processing costs.

2. FX Spreads: Reflect liquidity risk and currency conversion costs.

3. CPN Network Fees: A tiered, country-based variable basis point fee used to support the core functions of the network, including compliance, security, infrastructure, and development.

As CPN grows and Circle, along with third-party developers, introduces new value-added services through curated markets, additional usage-based fees will be implemented to support and maintain these services. These services may include fraud detection tools, risk management, wallet infrastructure, custody, billing, and advanced compliance capabilities. First-party (1P) and third-party (3P) service fees will create revenue opportunities for providers and enable financial institutions to customize payment experiences through modular, plug-and-play solutions.

A portion of the network and market fees will be strategically reinvested into core priorities, such as infrastructure upgrades, research and development, network operations, user acquisition incentives, and developer ecosystem growth— including funding for CPN integration and new applications. This reinvestment approach is designed to enhance the platform’s resilience, drive innovation, and accelerate long-term network expansion.

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