Circle is Phasing Out Bitcoin Buying/Selling Services and Will Focus on Social Payments

Circle, the messaging and instant payments startup, has decided to phase out its bitcoin exchange services. Up until now, the company has enabled many US citizens to quickly purchase Bitcoins with their debit and credit cards. 

The startup is one of the most well-known services and go-to places to buy and sell bitcoins with a variety of Fiat payment channels (debit, credit cards). However, the Company announced today that it will disable the buy/sell function on their website. Circle is also one of the most funded startups in the Bitcoin space, with over $136 million in equity funding.

The move comes after Circle’s CEO declared his frustration with the way Bitcoin core software is being developed:

The story is essentially one of gridlock amongst core developers, while mainstream companies are using this technology. We’ve been deeply frustrated with the lack of progress, and we want to move it forward.

Circle enables instant payments between users through an app called Circle Pay. The service uses the Bitcoin blockchain to quickly send and settle transactions in a totally transparent manner to the user. Despite this fact, hhowever, Jeremy Allaire, the CEO of the company, recently stated that Bitcoin may be obsolete in five or ten years:

Our view is that we’re still in the really early stages of the technology and its development. It’s highly unlikely that any of us will be using Bitcoin in five or ten years, in the same way that few of us are using NCSA Mosaic or Netscape Navigator today.

Circle has established a partnership with another well-funded bitcoin startup. Circle is now redirecting all customers to go to Coinbase in case they want to purchase or sell Bitcoins. The Company will focus on a full-fledged messaging app featuring social payments, instant transactions, and zero-fee currency conversions.

We have never been focused on convincing consumers to replace their familiar native currencies with bitcoin, but instead wanted to bring the benefits of public blockchains and digital assets to consumers without requiring them to know the technical details.

With this intro statement, the company announced the release of Spark a  “set of protocol additions that provides a way for digital wallets to exchange value using blockchains, including Bitcoin, as settlement layers.” This system will essentially enable the cooperation between companies similar to Circle. According to the company, Spark will power KYC/AML compliant transactions. Circle announced the first of such cooperations via its Spark engine:

The first implementation of Spark comes via two new markets and currencies. We’re excited to announce partnerships with Korea’s Korbit and the Philippines’ Coins.ph. These two early market leaders in digital currency technology will connect to Circle through partnership and implementation of the Spark APIs.

Spark will be an open source project, although the company hasn’t released it yet. Circle hopes to “work closely with similarly-minded ecosystem participants to advance the technology and integrate it with additional public and private blockchains.”