Utopia Labs, a Paradigm-backed payments firm, launched a new service allowing U.S-based firms to send USDC to domestic bank accounts on July 20.
The new product seeks to limit friction between web3 and traditional banks. Finding local banking partners has historically posed a challenge for many crypto firms, with the recent bear trend and failure of crypto-friendly institutions in Silvergate and Silicon Valley Bank likely making matters worse.
“We’re allowing any crypto company based in America to send USDC to literally any other U.S. bank account, and that U.S. bank account receives U.S. dollars,” Kaito Cunningham, Utopia Labs’ co-founder and CEO, told The Defiant. “The status quo today is that you have to use some sort of centralized exchange or custody solution to access these rails… this is all done through self-custody.
Utopia Labs will charge a 0.3% fee on transfers using the service, although the rate is subject to change.
Cunningham added that companies residing in most countries can use Utopia to transfer USDC to U.S.-based bank accounts, excluding firms based in sanctioned jurisdictions including Cuba, North Korea, Iran, Syria, Belarus, and Russia.
Utopia Labs hopes to make it easier for companies operating with cryptocurrency to interact with the legacy banking sector. The service can also facilitate streamlined fiat withdrawals for consumers.
Utopia Labs partnered with several third-party firms to provide the service, with Safe Wallet providing its front-end interface while Bridge provides USDC to USD conversion and compliance services.
Businesses must register with Utopia in order to access the off-ramping service. Cunningham said users can expect U.S. dollars to arrive in their nominated bank account within three business days of initiating a transfer.
Utopia Labs raised $23M in a Series A financing round led by the venture firm Paradigm in 2022. The company has since worked with hundreds of organizations including providing payment processing services for Friends with Benefits and PleasrDAO.