Giant Fintech Circle launches a new cryptocurrency linked to US dollar reserves.
Crypto-currency, named USDC or USD Coin, will be a token ERC20 built on top of the Ethereum blockchain.
The company raised $ 110 million for the new E-Series financing project run by Behemoth crypto-mining currencies Bitmain .
Other investors who fund the project include IDG Capital, Accel Partners, Digital Cur- rency Group, Capital Pantera, Blockchain Capital, Breyer Capital, General Catalyst and Tusk Ventures.
Circle develops the USDC on the basis of the open-source fiat Stablecoin framework developed by its own subsidiary, CENTER . Circle is currently the only member of CENTER, but the company plans to attract more companies in the near future.
Circle indicates on its website that government-certified financial institutions such as Coinbase, Square and traditional banks will all be able to join the CENTER network and issue USDC tokens against their clients' trust deposits.
The USDC is touted as a cryptocurrency that attacks both the volatility problem with other virtual currencies and ensures regulatory compliance.
Circle says that the USDC will be particularly helpful to cryptocurrency traders to quickly hedge trading positions by converting their assets into USDC, which will be stable thanks to its support by a fiat currency.
The currency will also be available as the main trading pair on Poloniex, which the company acquired earlier in February.
Circle started in 2014 as a peer-to-peer payment service based on Bitcoin and has since ventured further into the cryptocurrency space. The company currently manages a mobile payment application based on cryptocurrency, OTC trading and a cryptocurrency exchange.
With the last investment, the market value of Circle has exceeded $ 3 billion. The company has also received funding from Goldman Sachs and Baidu.
It should be noted that the Circle USDC is not the first cryptocurrency aimed at stability, nor even to be pegged to the US dollar.
Tether, the 15th most important cryptocurrency of the moment with a market capitalization of more than $ 2 billion, is another crypto-currency alternative pegged to the dollar.
According to Circle, the main difference between the USDC and other fiat-based cryptocurrencies lies in the fact that it plans to ensure the regulatory compliance of its cryptocurrency.
Circle's choice to use the Ethereum blockchain for their cryptocurrency is also particularly intriguing.
The Ethereum blockchain could be a popular choice for most ICOs because of the simplicity that it offers, but it should not be the choice of such a well funded project, given the problems of scalability she continues to suffer from.
Another major problem with indexed currencies such as the USDC is that there is no way of knowing if the number of coins that they issue is actually supported by liquid financial assets, according to Fortune .
Last November, Tether printed 50 million pieces in less than a week without evidence of equivalent USD support in the reserve – raising concerns about the value real money. It remains to be seen if Circle can maintain a higher level of transparency with the USDC.
Posted on May 16, 2018 – 15:50 UTC