Goldman Sachs-backed Circle Internet Financial Ltd. has launched a new cryptocurrency ‘USD Coin’ (USDC) backed by the US dollar on the Ethereum blockchain. The launch is part of the Boston-based startup’s plans ‘to rebuild the financial system on top of crypto.’
Jeremy Allaire, CEO of Circle, stated that stable coins like USD Coin (USDC) ‘will become the base layer that supports every financial application.’
‘It has to be legitimate, trustworthy, built on open standards. We are solving a lot of these fundamental problems that exist. That’s a huge difference from something like tether.’
Circle USDC (USD Coin) is a solution that enables customers to purchase and use USDC fiat tokens for payments and trading in the crypto ecosystem. The coin will be immediately available on Circle’s Poloniex exchange and Circle Trade and will soon be introduced on other partner exchanges like DigiFinex, CoinEx, KuCoin, OKCoin, Coinplug, and XDAEX.
‘Other wallets, exchanges, and software applications can add support for the USDC token through the open ERC-20 standard,’ the company announced.
USDC tokens are compliant with the ERC-20 standard and can be cashed back out to bank accounts. While tokenizing dollars is free, Circle will charge 0.1% to redeem USDC tokens for dollars.
Circle has also created Centre – a consortium of industry players that will monitor the issuance of USDC coins. Centre will be an ideal platform for deposits and fiat conversions for the stable coin. It aims to define standards for fiat stable coins, based on the technology it developed for Circle Pay. Likewise, Centre has developed a set of norms for commercial issuers of USDC that includes requirements for licensing, compliance, and proof of reserves.
In a blog post, Circle’s founders Sean Neville and Jeremy Allaire also highlighted their strategic planning and partnership with Bitmain. Bitmain has been the leading partner for Circle with its $110M investment.
They added, ‘This partnership will help drive global interoperability that benefits consumers, business ventures, institutions, and marketplaces everywhere. Specifically, Bitmain will help CENTRE introduce multiple fiat stable coins in a variety of geo-currency zones.’
Other partners of Circle include existing investors IDG Capital, Breyer Capital, General Catalyst, Accel, Digital Currency Group, and Pantera, and new investors Blockchain Capital and Tusk Ventures.
Besides USDC, other stable coins pegged to US dollars include Tether, TrueUSD, Gemini dollar, Paxos and CarbonUSD.