Goldman Sachs-backed Crypto Startup Circle Launches a USD Pegged Stablecoin
Circle, the popular cryptocurrency startup backed by Goldman Sachs has launched a new “stablecoin” pegged to the U.S. Dollar. Called as the ‘USD Coin’ (USDC) the digital asset will be backed by physical money stored in the company’s bank accounts.
The company said that the stablecoin will be initially available on its native trading platforms like the Circle Trade and Circle's Poloniex exchange, and later available on other platforms like KuCoin, OKCoin, CoinEx and others.
The basic purpose behind launching this stablecoin is to tokenize the U.S. Dollar and enable free flow of value on the public blockchain. In the official blog post by Circle co-founders Sean Neville and Jeremy Allaire, they noted that the USD Coin (USDC) shall be made available first to the partner institutions.
They further noted: "Individuals and institutions can enroll in this service to deposit U.S. dollars from bank accounts [and] convert those dollars into tokens usable everywhere the internet reaches (subject to the token’s compliance controls), and redeem USDC tokens and cash out to bank accounts.”
Circle has already created a consortium named CENTRE defining the standards for fiat stablecoins. The USDC is the first “fiat token” released by CENTRE, the blog post noted. It further added that “Price-stable tokens are foundational requirements for enabling powerful new global financial contracts, products, and services on the internet. USDC is the first of several fiat tokens CENTRE expects to deliver, and Circle is the first of several forthcoming CENTRE members to launch USDC issuance.”
The blog post also goes to explain how the advent of blockchain technology and crypto assets has enabled us to exchange value globally, at an extremely fast speed and reduced costs. It notes that “A fundamental building block of this vision is the tokenization of fiat currency itself, through what are now referred to as fiat stablecoins. A safe, transparent and trustworthy layer for fiat to operate over open blockchains and within smart contracts is a necessary precondition to the broader and more revolutionary potential of a crypto-powered global economy. USDC aims to meet this need.”
Another blog post by the company talks about how the USDC has received support from a wide crypto ecosystem. Popular wallet services like BitGo, Coinbase, imToken, and Ledger have extended support for the stablecoin. Payment processing giant BitPay is also part of the CENTRE consortium among 30 other partners.
While commenting on the launch of USDC, BitPay CEO Stephen Pair said: “BitPay has always been supportive of open source crypto communities and blockchain initiatives and likes the direction CENTRE is taking with USDC. We envision a future where all digital assets and payments live on the blockchain.”