Along with the new funding round, Circle also announced their plans for a new stable cryptocurrency, Circle USD (USDC) which would be pegged to the US dollar. The Boston based company now plans to introduce a United States dollars backed cryptocurrency to bring all of the advantages of blockchain to traditional forms of payment.
Circle is essentially trying to create a new kind of banking and financial services firm, powered by cryptocurrencies and the blockchain software underpinning them.
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.
In an official press release, Circle revealed the release of USD Coin, a stablecoin backed by real FIAT currency (in this case US Dollars) that would be used on a daily basis in Poloniex, to begin with.
Bitmain is one of the most important and forward-thinking companies in crypto and has become a critical infrastructure provider for the entire crypto economy.
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.
The USD-C token will be based off of the Ethereum network, and Circle's subsidiary company, Centre will manage its protocol. Pitched as "a solution that enables customers to purchase and use USDC fiat tokens for payments and trading in the crypto ecosystem", the token will be backed by physical USA dollars held in reserve, making it what Circle refers to as an "open source fiat stablecoin".
As an institutional exchange with high volume trading, Circle recently, they doubled their minimum order size from $250,000 to $500,000.
That's why Circle is creating a token that is pegged to the US dollar. However, because of some of the previous actions by Bitfinex and Tether, some in the crypto-community are still skeptical of fiat-backed 'stablecoins'. Jumping on the Ethereum bandwagon Following the close of the round, Circle said it would create a new cryptocurrency, that uses the Ethereum blockchain, with it's value "pegged to the price of the US dollar", according to Reuters.
"Existing fiat-backed (cryptocurrency) approaches have lacked financial and operational transparency", Circle said in a blog. USDC would be an ERC-20 Token on the Ethereum Network based on the network rules defined by CENTRE. It is built on an open source framework with an open membership scheme that eligible Financial Institutions (FI) can participate in (CENTRE).