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Circle launches US Dollar “Stable Coin” and Bitmain partnership

us dollar bill close up photo

Crypto finance company Circle has announced it will launch a new “stablecoin” token based on the US dollar.

For all the benefits of Bitcoin, its price volatility, though popular with investors, has hindered its adoption by the mainstream economy. When the value of a currency changes rapidly it is difficult to conduct transactions as the price of a good or service may be significantly different at time of purchase decision than at the time of transaction.

According to Circle, “a price-stable medium of exchange and store of value is missing” in the current crypto-economy, and is “badly needed in order for global financial interoperability to function reliably and consistently.

To achieve true mainstream adoption of a blockchain-based payment system, Circle believe that “a price-stable currency, such as a token pegged to the US dollar,” is necessary. Such a currency would be used not just for day-to-day transactions but for “financial contracts built on smart contract platforms, such as tokenized securities, loans, and property”.

US Dollar-backed stablecoin

Circle’s answer is the USDC (USD coin) which users can buy in fiat and use in the “crypto ecosystem”. It is described as “full reserve US dollar-backed stablecoin” and will be independently overseen by CENTRE.

The USDC coin will allow for greater transparency than fiat currencies and operate “within the regulated framework of US money transmission laws, and reinforced by established banking partners and auditors.

Circle have also announced a partnership with Chinese crypto-mining company Bitmain, who are the main investor in Circle’s latest investment round, along with Breyer Capital, Pantera and IDG Capital, among others.

Bitmain will be joining in Circle and CENTRE’s stablecoin plans with the aim to “drive global interoperability that benefits consumers, business ventures, institutions, and marketplaces”. The vision is for there to eventually be a variety of stablecoins for use in different markets.

Image From Shutterstock

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