Investors are piling into Polygon’s POL token amid excitement surrounding a planned tech upgrade to the $1.5 billion blockchain.
On Thursday, Polygon Labs, the firm behind the blockchain, announced the Open Money Stack, a new stablecoin payment framework set to launch later this year.
It aims to let users instantly and reliably move money anywhere across the $162 billion DeFi ecosystem, providing an alternative to restrictive and often costly financial intermediaries like banks.
“Open and interoperable money ensures that it is usable everywhere, by everyone, on their own terms,” Marc Boiron, CEO of Polygon Labs, and Sandeep Nailwal, CEO of the Polygon Foundation, said in a joint post announcing the new technology.
“People don’t need to understand settlement mechanics or lose sleep because they are worried about when money will arrive.”
The POL token, which is used to pay transaction fees on the network, among other things, has risen 13% over the past 24 hours. That adds to a 31% gain for the token over the past week, helped along by a broader crypto market recovery.
Stablecoin rush
Polygon’s announcement comes as both traditional finance firms and crypto upstarts rush to leverage the regulatory clarity surrounding stablecoins following the passing of the Genius Act in July.
But Polygon is far from the only firm hoping to capitalise on the situation.
Fintech giant Stripe is developing its own blockchain-based payments platform called Tempo, planned to launch later this year, which buy-now-pay-later firm Klarna will use to launch its own stablecoin.
Tempo has lured several well-respected crypto researchers, executives, and software engineers, including former Ethereum Foundation researcher Dankrad Feist, former Optimism Labs CEO Liam Horne, and Rice University Professor Mallesh Pai.
Elsewhere, stablecoin issuers Tether and Circle, as well as Visa, BVNK and Ripple are all actively building or expanding stablecoin-based payment networks and infrastructure.
Keeping users onchain
A perennial problem in the crypto industry is that blockchains have had a hard time replicating the same functionality that traditional financial rails provide. Users eventually need to take their money offchain and rely on traditional financial infrastructure.
Polygon Labs’ intent is to create a system where users can do everything while keeping their money in crypto.
The Open Money Stack is designed to work across different blockchains and allows financial institutions and fintech firms to integrate it into their own products.
Individual components include blockchain rails, wallet infrastructure, fiat on-ramps and off-ramps, stablecoin interoperability, compliance, and onchain identity verification, among other things.
The framework will also give users the ability to earn yield on their funds while they’re not in use through DeFi, with different options depending on the user’s risk appetite.
