Circle, the $3 billion bitcoin startup backed by investment banking giant Goldman Sachs, has created a cryptocurrency “stablecoin” whose value is pegged to the U.S. dollar and backed by physical currency stored in company-owned bank accounts.
Announced on Tuesday, the new cryptocurrency — USD Coin (USDC) — will allow individuals and institutions to tokenize physical currency for use in overseas trading and other cross-border transactions that require rapid settlement.
Commenting on the announcement, Jeremy Allaire and Sean Neville, co-founders of Circle said:
“When we founded Circle five years ago, we and many in the crypto community envisioned fiat money and financial contracts executing on top of distributed public network infrastructure, building on open standards that would allow us all to share value as instantly and easily as we can access content in web browsers and exchange messages in email and messaging apps. Just as HTTPS, SMTP and SIP enabled free borderless information sharing and communications, crypto assets and blockchain technology will enable us to exchange value and transact with one another in a similar way: instantly, globally, securely and at low cost.”
Circle previewed USDC back in May in tandem with its announcement that it had achieved a $3 billion valuation following a Series E funding round led by bitcoin mining giant Bitmain.
At launch, 30 partners have agreed to provide support for USDC, including top-10 cryptocurrency exchanges OKEx and DigiFinex, who have a combined daily trading volume of more than $1 billion. The token will also soon be listed on decentralized cryptocurrency exchange (DEX) platforms including Paradex and IDEX, as well as lending protocol Dharma.
Additionally, major cryptocurrency wallet services including Coinbase, BitGo, Ledger, and imToken will provide native support for USDC.
USDC joins a growing list of stablecoins seeking to unseat the controversial tether (USDT) as the dominant USD-backed cryptocurrency token. Just this month, cryptocurrency exchange operators Gemini and Paxos have launched stablecoins under the oversight of New York’s Department of Financial Services (DFS), creator of the rigorous BitLicense regulatory framework.