Circle, the issuer of the USDC stablecoin, has teamed up with the prominent cryptocurrency exchange OKX to enhance liquidity for converting USDC to US dollars.
As part of this new collaboration, OKX is introducing zero-fee conversions between USDC and USD, as announced in a joint statement on Wednesday.
Kash Razzaghi, Circle’s chief business officer, highlighted that the key development allows users to easily convert USD to USDC and vice versa directly on the OKX platform, creating a smooth and transparent experience for on and off-ramping.
Jason Lau, OKX’s chief innovation officer, noted that the improved USDC liquidity leverages OKX’s strong banking partnerships and compliance strategies, enabling users to exchange USD and stablecoins “without any friction or fees, for the first time.”
Challenges in Exchanging Stablecoins and USD
Although the use of stablecoins is increasing, there are still several challenges, such as transaction fees on networks and the need for banks to act as intermediaries for exchanges, as noted by Ashley Lannquist, a former digital finance analyst at the International Monetary Fund.
Among the 23 networks that support USDC, OKX offers 12 networks, which include Ethereum, X Layer, Aptos, Arbitrum One, Avalanche C-Chain, Base, Optimism, Polygon, Polygon (USDC.e), Solana, Sui, and OKT Chain. While this partnership between Circle and OKX does not impact network fees, it aims to address some of the infrastructure issues.
Lau stated that prior to the collaboration with Circle, there were challenges when exchanging stablecoins for USD. He pointed out problems such as order book depth, trading fees, and product design, noting that users viewed the swap between USD and stablecoins similarly to any other asset exchange.
“With our new partnership with Circle, we have established 1:1 conversions between USD and USDC and have collaborated with banking partners to enhance the process of converting fiat currency, benefiting both retail and institutional users,” Lau explained.
Banking Partnerships
To provide greater USDC liquidity to its 60 million global customers, OKX has been partnering with various banking and payment networks.
“Currently, OKX’s main on-ramp solutions involve key partners like Standard Chartered Bank, DBS, Bank Frick, and global payment platforms such as Apple Pay and PayPal,” Lau added.
He also noted that the improved USDC liquidity would be accessible to any user with USD and USDC in their OKX account.
Razzaghi from Circle stated that the new conversion features will be accessible through various OKX products and services, including trading, sending, and holding USDC.
OKX provides substantial liquidity for Tether USDT.
In addition to enhancing liquidity for USDC, OKX is also focused on increasing support for competing stablecoins, particularly Tether’s USDT, which is the largest stablecoin by market cap.
“OKX has consistently prioritized deep liquidity and accessibility for stablecoins, especially USDT, which is the most frequently used and traded stablecoin on our platform, as shown by over $330 million in daily trading volume for pairs like ETH/USDT,” stated an OKX spokesperson.
Furthermore, the representative mentioned that OKX is actively collaborating with various stablecoin issuers to boost liquidity beyond just USDT.
