In addition to the digital version of the USA dollar, Circle announced a $110 million funding round led by cryptocurrency mining company Bitman, bringing its capitalisation to almost $3 billion.
The new coin will be based on a framework "developed and governed by CENTRE, which will provide independent oversight of Circle's offering". Bitmain will be a partner in the effort; the plan is for the company to help Centre launch multiple fiat-backed cryptocurrencies, Circle said.
Circle explained that USDC is a solution that enables customers to purchase and use USDC fiat tokens for payments and trading in the crypto ecosystem.
"It is hard to use something like bitcoin if the volatility is so high", Circle Chief Executive Officer Jeremy Allaire said at a media event. The USDC coin will be offered on its cryptocurrency exchange Poloniex. Again, this pretty much goes against the whole point of cryptocurrencies, which were originally created to present a transparent financial market free of regulation from federal government and the influence of big banks. The company now runs a cryptocurrency-based mobile payments application, an over-the-counter (OTC) trading business, and a cryptocurrency exchange.
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Along with this new investment round, Circle has also announced that it will be launching a new stable cryptocurrency, Circle USD (USDC) which would be pegged to the US Dollar enabling businesses and consumers to transfer values more efficiently. This is a foreign concept to an institution like Goldman Sachs, or more traditional investors, for that matter.
That's why Circle is creating a token that is pegged to the US dollar.
Tether, the 15th largest cryptocurrency at the moment with a market cap of over $2 billion, is another popular dollar-pegged cryptocurrency alternative.
Though Tether was never the only "stablecoin" backed by a fiat currency, a recent announcement by Circle is showing that the well-known USDT token is soon to have some competition. Circle claims to basically be building the infrastructure of free global p2p transactions.
USDC coin will be backed by audited deposits on a 1:1 basis, and available within Circle's payment apps. It remains to be seen whether Circle can maintain a higher level of transparency with USDC.
Last November, Tether printed 50 million coins in less than a week without proof of backing from equivalent United States dollars in the reserve - raising concerns over the actual value of the currency.