After securing a $110 million Series E equity investment deal spearheaded by China-based mining company Bitmain, Circle, the cryptocurrency-focused financial service is now worth close to $3 billion. According to an official report by the Boston-based company, some of the other participants in this round of fundraising include IDG Capital, Breyer Capital, General Catalyst, Accel, Digital Currency Group, and Pantera, along with new investors Blockchain Capital and Tusk Ventures.
Ever since it was founded in 2013, Circle has always been largely involved with cryptocurrencies and blockchain. In the beginning, Circle was a platform that allowed people to purchase Bitcoins without having to know anything technical about it. However, shortly after that, after the first Bitcoin boom died down, Circle pivoted – this time targeting peer-to-peer, social payment services.
Then, three months ago, Circle announced that it will be purchasing one of the biggest cryptocurrency exchanges in the world, Poloniex – in an acquisition of about $400 million.
Launching a “US Dollar Coin”
With the massive $110 million as funding, Circle is seeking to improve its products and services by developing a “US dollar coin”, or USDC for short. The USDC is price-stable, blockchain-based currency, such as a token pegged to the US dollar, that allows users to make or receive payments within the Circle ecosystem.
According to Circle’s founders, Sean Neville and Jeremy Allaire, the problem with Bitcoin and other cryptocurrencies out there is their price volatility, which inadvertently makes people want to hoard them as opposed to spending them. They acknowledge that “a price-stable medium of exchange and store of value is missing, and badly needed in order for global financial interoperability to function reliably and consistently.”
In an interview with CoinDesk, Allaire explained that the “stable-coin” project is crucial to Circle’s plans for future expansion, which includes sectors like its mobile payments application, its over-the-counter (OTC) trading business, and its exchange service.
“A core part of vision is open-protocols that would enable the free movement of value. A real critical piece is there has to be open, interoperable standards for our how fiat money can move over blockchains. That’s where fiat stablecoins and payment protocols come into play.”
Seeks to Right all the Wrongs by Other USD-Pegged Coins
Circle’s USDC is not the first stable-coin in the crypto industry. Some of the more well-known ones include Tether, the controversial cryptocurrency that is run by the same operators that run Bitfinex, and Basis, the stable-coin backed by Bain Capital and Andreessen Horowitz.
When asked about his thoughts on Tether, Allaire replied that he sees “a lot of weaknesses and challenges with Tether.” But since Circle is more of an open-source project with a more robust governance model, Allaire points out that there quite a huge distinction between USDC and USDT.
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