Crypto Startup Circle Raises $110 million, Plans To Issue USD-Backed Coin

Crypto Startup Circle Raises $110 million, Plans To Issue USD-Backed Coin

Circle, the Goldman Sachs-backed cryptocurrency has managed to raise $110 million in an investment round under the leadership of Bitmain Technologies, the Chinese virtual coin, at least according to a report by Circle on Tuesday. This is something most cryptocurrency individuals find maddening about using cryptocurrency, as its value can dramatically drop in an instant.

Bitcoin mining company Bitmain, and Circle Internet Financial Ltd. are forming a partnership focused on creating a fiat-based cryptocurrency.

Along with this new investment round, Circle has also announced that it will be launching a new stable cryptocurrency, Circle USD (USDC) which would be pegged to the US Dollar enabling businesses and consumers to transfer values more efficiently. Other investors in this financing round include previous Circle backers IDG Capital, Breyer Capital, General Catalyst Partners, Accel, Digital Currency Group, and Pantera Capital, as well as new Circle investors Blockchain Capital and Tusk Ventures, Circle said in a blog post.

This week's moves further reflect Circle's on-again, off-again enthusiasm for cryptocurrencies - or at least, their overt endorsement of them in public.

The cryptocurrency, named USDC or USD Coin, will be an ERC20 token built on top of the Ethereum blockchain.

Last month, Jeremy Allaire, the CEO of Circle, announced that the over-the-counter (OTC) wing of the company had made a decision to increase the minimum ticket size on Bitcoin trades from $250,000 to $500,000. Several other companies have offered similar stablecoins-most notably Tether(USDT), which is associated with one of the largest exchanges, Bitfinex.

But the most interesting projects right now are probably CENTRE and a new tokenized United States dollars coin. Each token, called Circle USD Coin (USDC), will be backed by reserves of US dollars, Circle said. The new cryptocurrency, dubbed USD Coin, is a so-called "stablecoin" created to avoid the volatile price swings some cryptocurrencies have suffered from.

Working with regulators and established banks has been one of Circle's operating principles, unlike some in the cryptocurrency sector.

Initially announced late past year, CENTRE is an open-source initiative from Circle which would allow both cryptocurrencies and fiat currencies to be transferred in a digital form, running on Ethereum Blockchain with its own ERC-20 token. "As I like to say, go in through the front door-don't go hide in the shadows", Allaire told xconomy. "Something like this makes it more possible". "Specifically, Bitmain will help Centre introduce multiple fiat stablecoins in a variety of geo-currency zones".

Jeff Engel is a senior editor at Xconomy.

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