Stablecoin publisher Circle Internet Financial on Friday rolled out a smart contract code base called Perimeter Protocol, which aims to serve as an open-source foundation to build tokenized credit markets.
The company said in a blog post that Perimeter can support a variety of credit use cases, including invoice factoring, payroll advances, instant settlement for merchants and credit trading for institutional investors. The white paper is publicly available and developers can freely copy the codebase and build products on top of it.
The protocol also marks the first release from Circle Research, the company’s new division dedicated to open source development.
The release came as the introduction of traditional financial instruments such as credit to blockchain-based applications – often referred to as tokenization of real-world assets (RWA) – is gaining momentum. Tokenization could disrupt the existing financial system by creating a more efficient and transparent system, according to a report from Bank of America (BAC). Bernstein predicted that tokenized assets could grow to a $5 trillion market in the next five years.
Read more: Banking giants are buzzing about tokenization of real-world assets, while DeFi craves collateral
Stablecoins are an important part of the blockchain-based credit markets to settle transactions. Facilitating tokenization efforts and the development of decentralized finance (DeFi) lending platforms could help Circle increase the utility of its $26 billion USDC and euro-pegged token EURC.
“We have seen the great utility that stablecoins and USDC have delivered for developers, businesses, end users and more across a range of use cases, including for global credit markets within DeFi,” the company said in a blog post. “However, for new entrants looking to participate in these markets, the ability to securely unlock credit across the chain through secure standards and underwriting represents a significant barrier to entry.”
Institutional DeFi platform OpenTrade’s yield-generating tokenized US Treasury pool was the first offering built using Perimeter.