Goldman Sachs-backed, New York (Reuters) digital currency startup – Circle – has raised up to $110 million in an investment round that is led by Bitmain Technologies – a Chinese digital currency mining company. Boston-based Circle also said that it would develop a new digital currency pegged to the value of the US dollar, allowing consumers and businesses to transfer value easily and more efficiently.
The Token of Circle
The token of Circle are referred to as USDC (Circle USD Coin), and each token will be backed by the US dollars reserves, according to Circle. The company wants to start the process this summer. Digital currencies such as BTC have been struggling to take hold as feasible alternative methods of payment, this is mostly because of its extreme volatility.
Nevertheless, a lot of businesses are captivated with the underlying technology known as blockchain, which they believe can make transactions cheaper and faster.
Why Circle Wants to Create a Dollar-Pegged Digital Currency
The digital currency firm believes a digital currency whose price is attached to a more stable currency can help increase the adoption of blockchain-based systems. Jeremy Allaire – the Chief Executive Officer of Circle – said in a media event that it’s very difficult to use a digital currency like bitcoin if it has a very high level of volatility. He said the digital currency they are trying to create makes it more possible.
The new digital currency will be initially issued by the company, and it will run on a platform that is managed by a wholly owned division of the company – Centre. The CEO said the firm will make Centre independent as more entities join the platform. In conjunction with the investment of Bitmain technologies, it will be involved with the subsidiary of Circle (Centre) and help to launch digital currencies linked to other fiat currencies or legal tenders.