Circle, the Goldman Sachs-backed Fintech firm, has announced that it will introduce a new cryptocurrency pegged to the US dollar. The coin, named as Circle USDC (USD Coin), is aimed at facilitating trading and making payments in the digital space. Circle is also trying to resolve the issue of volatility through this token.
According to the Circle, the invention of cryptocurrencie and distributed ledger technology has paved way for the “open internet.” However, the company has pointed out that ‘a price-stable medium of exchange and store of value is missing.’ This is crucial for ‘global financial interoperability to function reliably and consistently.’
Circle, through a blog post, stated
“A price-stable currency, such as a token pegged to the U.S. dollar, is critical for enabling mainstream adoption of blockchain technology for payments as well as for supporting maturation in financial contracts built on smart contract platforms, such as tokenized securities, loans, and property.”
Circle believes that transacting in currencies which fluctuate with extreme volatility creates complexity and fragile settlement contracts, especially when compared to transacting in “tokenized fiat money” or fiat-pegged crypto assets.
The USD Coin is created by a company named CENTRE, which will also offer independent oversight of the Circle’s offering.
Jeremy Allaire, the CEO of Circle had announced last month that the over-the-counter (OTC) division of the company will increase the minimum order size of Bitcoin from $250,000 to $500,000. Notably, the announcement came at a time when cryptocurrency exchanges had reported a decline in their trading volume compared to the beginning of this year.
Partnership With Bitman
Circle also announced a $110 million funding (Series E equity investment) from Bitmain, taking the total capitalization of the company to $3 billion. Other parties who are involved in the funding process includes Breyer Capital, IDG Capital, General Catalyst, Accel, Pantera, and Digital Currency Group. Blockchain Capital and Tusk ventures are the notable new investors. Circle has also revealed that Bitmain will also join CENTRE’s efforts to develop several fiat-backed stablecoins that will provide easy financial interoperability across the world.
