Mobile Payments Company Circle Raises $110 mln to Develop US Dollar-based Stablecoin | News ICORating
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Mobile Payments Company Circle Raises $110 mln to Develop US Dollar-based Stablecoin

Mobile Payments Company Circle Raises $110 mln to Develop US Dollar-based Stablecoin

Mobile payments and cryptocurrency trading company Circle has raised $110 million in funding from mining hardware manufacturer Bitmain to develop a US dollar-linked stablecoin.

According to a Bloomberg report from May 15, Bitmain leads an $110 million round of investment in Circle. The two companies are now partners in a venture to create a stablecoin linked closely to the value of the US dollar, backed by the US dollar, and set to be released in summer 2018.

Stablecoins are cryptocurrencies that attempt to deliver the low transaction fees, decentralization, security, and quick transaction times of blockchain without the volatility of swiftly changing rates. According to Bloomberg, Circle’s stablecoin project, called the USD Coin, or USDC, will be an ERC-20 token “backed one-to-one to the dollar, with the greenbacks to be stored in auditable bank deposits and redeemable by verified buyers.”

Circle have said that the $110 million investment raises their valuation from a reported $480 million in 2016 to over $3 billion. The Boston-based company already boasts over 7 million users for its Circle Pay mobile payments app and Circle Trade cryptocurrency trading operation. They plan to incorporate USDC into both Circle Pay and Circle Trade as well as to list the token on Poloniex, a cryptocurrency exchange acquired by Circle in February 2018.

Bloomberg reports that Goldman Sachs Group Inc., Baidu Inc. and investment bank China International Capital Corp are among the investors that have participated in previous Circle funding rounds.

Circle CEO Jeremy Allaire called USDC “a version of fiat that can move at the speed of the internet with global reach, with much less cost, and with high levels of security.”

Allaire also said that Circle aims to provide greater transparency and may disclose its partner banks when Circle’s new stablecoin goes live. However, Allaire declined to say whether USDC traders will be charged a fee to convert tokens to fiat, as stablecoin competitor Tether does.

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