Goldman Sachs Start-up looking to create USD Coin. The Fintech company ‘Circle’ aim to make a better, faster version of he U.S. dollar.
The company announced on Tuesday 15 a new cryptocurrency pegged to the dollar with $110 million investment round led by crypto mining firm Bitmain -has made Circle’s value close to $3 billion.
Jeremy Allaire, CEO of Circle believes it holds an incredible amount of power for the dollar as it’s a dollar that works on blockchain.
Circle is one of the highest funded blockchain start-ups – investors include that of Goldman Sachs Group and Baidu. The firm uses bitcoin blockchain for its transactions.
The USD Coin will solve volatility in the cryptocurrency market as it will be pegged to the dollar.
Stan Druckenmiller is bearish on cryptocurrency market and believes virtual currencies cannot be used for payments as the value changes so erratically.
It is no surprise Druckenmiller would be confident to criticise as the leading cryptocurrency bitcoin has seen much volatility over the past few months after it dropped more than 50 percent from it $20,000 peak in December 2017.
Circle investors are required to hold $1 for every USD Coin. This will keep the price stable. Companies such as Tether and Basis also offered “stable coins” with a value pegged to USD.
Allaire does note that there is a need for a more compliant alternative to Tether, which has a $2.2 billion market cap.
Allaire was quoted in an interview saying:
“When I look at the convergence of traditional finance and the crypto space, it’s begging for that”
He went on to say that there are many banks who are enthusiastic about it and would definitely support it.
Once USD’s are transferred to Circle’s USD Coins, it will be moved within seconds due to blockchain technology. Eventually they will add tokens pegged to the Euro and Pound too. Asian currencies are less likely as they are too competitive.
The USD Coin will be open-sourced, allowing many developers to work on the project. The USD Coin is being developed by the CENTRE Organisation – who will provide oversight of the Coin offering.
Bitmain is leading a $110 million strategic investment in Circle – bringing it’s valuation near $3 billion. Existing investors are included in the funding round such as:
The USD Coin runs on ethereum blockchain, but the company says they would consider other platforms that could be beneficial.
“Ethereum is the best bet but it’s not necessarily the end game. For now it’s specifically on Ethereum”
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