What is the Circle Payments Network (CPN)?

CPN is a blockchain-based payment coordination protocol developed by Circle. It allows licensed financial institutions to send, receive, and settle cross-border payments using stablecoins like USDC and EURC. The network combines offchain APIs with onchain smart contracts to manage transactions.

How does CPN work in practice?

An Originating Financial Institution (OFI) converts fiat to stablecoins and sends funds through a smart contract. The system matches this OFI with a Beneficiary Financial Institution (BFI) that can convert and disburse funds locally. All key steps are validated and executed onchain for transparency and auditability.

What are the main benefits of CPN?

CPN enables 24/7 real-time settlement, reduces transaction fees, and improves cross-border payment efficiency. Institutions can embed logic into payments using smart contracts, which allows automated actions like escrow or multi-party distribution. The system also supports multi-chain stablecoin movement through Circle’s cross-chain protocol.

What are some current limitations or challenges facing CPN?

Only licensed institutions can participate, which limits broader access for now. Onboarding requires strict compliance with AML, KYC, and regulatory rules. Technical integration with onchain systems may also pose a barrier for legacy institutions.