Markets

Bye-bye USD Tether? Circle Partners with Bitmain to Issue USD Coin

Bye-bye USD Tether? Circle Partners with Bitmain to Issue USD Coin

On Tuesday, Circle announced it had closed a United States dollars 110 million Series E equity investment led by Chinese bitcoin miner Bitmain.

The series E funding round includes significant investors such as Bitmain Technologies, Blockchain Capital, Pantera, Digital Currency Group and more venture firms.

With the latest investment, Circle's market value has crossed $3 billion. 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.

Poloniex has grown to become one of the world's leading token marketplaces. With this in mind, USA programmer and Silicon Valley investor Sam Altman believes USD Coin must enjoy limited oversight, or otherwise it makes little sense, if any, to introduce it. At a media event, Jeremy Allaire, the Chief Executive Officer of Circle said: "Where the volatility is so high and the accuracy to predict things is unstable, using a payment method like bitcoin can get hard".

More than a technical novelty, Allaire positioned the stablecoin project as essential to Circle's maturation and continued expansion, painting it as integral for its mobile payments application, its over-the-counter (OTC) trading business and its exchange service.




With this investment - which follows previous rounds involving Goldman Sachs, General Catalyst, and Accel Partners - the Boston company jumped to a massive valuation of around United States dollars 3 billion, instantly making it one of the most valuable crypto companies in the world. CENTRE will be defined by a set of open-source protocols that manage the network and transfer funds.

Though Circle didn't mention the Tether (USDT) token by name, USDC appears to be a more regulator-friendly version of the USD-pegged asset popular on big exchanges like Bitfinex.

In an official press release, Circle revealed the release of USD Coin, a stablecoin backed by real FIAT currency (in this case US Dollars) that would be used on a daily basis in Poloniex, to begin with.

Bitmain will also join CENTRE's efforts to introduce multiple fiat-backed stablecoins and provide financial interoperability around the world. Without the insane price swings we see in the crypto markets on a daily basis, people would be more inclined to actually spend the crypto on their typical day to day needs.

Of note in these materials is that all USD-C tokens will be issued on ethereum, a notable detail given the platform's issues in scaling to support its current diversity of users. We are excited to be working directly with Bitmain on realizing our shared vision. (The company said more announcements on the project are expected this summer).