Circle raises $110 M, plans to build USD-backed cryptocurrency

Goldman Sachs-backed start-up Circle introducing a crypto version of the US dollar

The first was a $110 million USD Series E equity investment and partnership with mining giant Bitmain; the second was its creation of a tokenized "stablecoin" asset created to hedge against price volatility in crypto transactions.

Circle started in 2014 as a peer-to-peer payments service based on Bitcoin, and has since then ventured further into the cryptocurrency space.

On its company blog, Circle said a USD-pegged token is essential for blockchain tech and payments to be adopted widely.

Circle, which is valued at almost €3 bilion following the latest round, also announced a new virtual currency or so-called "stablecoin", known as Circle USDC, which is to run on ethereum, will be pegged to the US dollar.

Investors in previous funding rounds include such giants as Goldman Sachs, Baidu and investment bank China International Capital.

A new project is offering bitcoin investors a refuge from market volatility., a US-based company for online payments, announced the launch of USD Coin, a dollar-pegged token on the Ethereum blockchain.

In February, it emerged that Circle had confirmed the purchase of US-based Poloniex in a deal estimated at $400m that would enable Circle to directly compete with one of the biggest cryptocurrency exchanges in the world, Coinbase.

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Bringing Poloniex into the fold put Circle on track to generate more than $1 billion in annual revenue, Fortune reported. Circle said each token, called the (USDC) Circle USD Coin, will be backed by the reserves of US dollars. CENTRE is a wholly owned subsidiary of Circle, but Circle CEO Jeremy Allaire said that the foundation would become more independent as other members joined.

The new cryptocurrency is set to compete with other virtual coins backed by traditional currencies.

It's clear that Circle wants to build the infrastructure of the cryptocurrency industry. "As I like to say, go in through the front door-don't go hide in the shadows", Allaire told xconomy. Yes, technically this new digital coin made by Circle and Tether essentially do the same thing, but what makes them stand apart is their platforms. This new USDC will make digital tokens that much more appealing to the masses.

If blockchain tech and cryptocurrencies take off in the way Circle and its partners envision, people will be able to "transmit value to anyone, anywhere, instantly, at zero cost, the same way I can share my opinion globally at zero cost or share content with someone instantly, globally", Allaire told Xconomy.

Bitmain will also join CENTRE's efforts to introduce multiple fiat-backed stablecoins and provide financial interoperability around the world.

Jeff Engel is a senior editor at Xconomy.

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