Circle has always been an intriguing company in the world of cryptocurrency. The firm makes it easier for consumers to invest in Bitcoin and altcoins through traditional payment methods. It now seems the company is looking to create its very own stablecoin, which is pegged to the US dollar. This currency will be known as Circle USD Coin, or USDC.
Another US Dollar-pegged Stablecoin is Coming
The world of stablecoins has been heating up as of late. For those who are unfamiliar with stablecoins, they are not traditional cryptocurrencies by any means. By default, a cryptocurrency cannot be non-volatile and stable, even though various companies feel there is a growing need for stability as of right now.
Despite some obvious drawbacks, Circle feels now is the time to launch its own stablecoin. This unit of account will be known as USDC, or Circle USD Coin. Every coin will be backed by 1 US dollar. It is a remarkable development, considering there are so many dollar-pegged stablecoins on the market already. All of these currencies will compete with one another for traction. Additionally, this move may introduce more people to the concept of digital currencies.
This news was announced by the company after completing a successful $110 million round of funding. That round was led by Bitmain Technologies, a company most cryptocurrency communities are all too familiar with at this stage. While it is unclear if this $110 million will be used solely to create Circle USD Coin, it seems to have played an integral role in the process.
No one will be surprised to learn that Circle isn’t too happy with the lack of stability associated with Bitcoin right now. For that reason, Bitcoin is not a “viable” cryptocurrency, according to company CEO Jeremy Allaire. By issuing a stablecoin pegged to the US dollar, Circle aims to drive adoption of blockchain-based systems in the coming months and years. The new coin will run on a network managed by CENTRE, which is a subsidiary of Circle.
Moreover, it seems Bitmain will also be involved with CENTRE and help launch coins linked to other fiat currencies or legal tender. This seems to indicate we can expect a lot more stablecoins in the future, although it remains to be seen if and when they will be issued. One has to wonder how many stablecoins are needed at this stage, even though some international currencies could be appealing in this regard.
One thing working in favor of Circle USD Coin is that the company will perform quarterly audits on the reserves backing the USDC Coin. Additionally, the firm will maintain a strict AML check on activity related to this new stablecoin. It seems Circle wants to make sure this currency can compete with other stablecoins and raise the bar a bit. It’s an interesting development worth keeping an eye on.