Circle, a cryptocurrency startup led by longtime technology executive Jeremy Allaire, has raised another $110 million, pushing its valuation to nearly $3 billion.
The round, led by Bitmain — a company that makes crypto mining equipment — with participation from several traditional venture firms, is one of the largest yet for a crypto startup, suggesting legitimacy and optimism for the still-nascent industry.
Circle launched four years ago as a sort of “bitcoin for dummies” wallet and payments service. Since then, it has ridden the highs and lows of the bitcoin and cryptocurrency markets, expanding internationally and acquiring its own crypto exchange, Poloniex, earlier this year for around $400 million.
Now it is launching a new product aimed at addressing one of the biggest issues of the crypto world: Its instability.
Bitcoin’s volatility has made it an entertaining tool for speculation but not for predictable, mass-market payments. So Circle is launching a new product called “USD Coin” — a so-called “stablecoin” that’s tied to the value of the U.S. dollar.
The idea is that people would use it for applications where cryptocurrencies are advantageous, but where a stable value — backed by fiat currency — is ideal.
Circle will be the first and only service that handles “USDC” for now, but the hope is that other networks will support it — Circle has established a separate entity called Centre, which will govern the network — and that other “stablecoins” based on other, non-U.S. fiat currencies will emerge using its open-source format.
What’s the point?
In the short term, the crypto market needs price-stable assets for trading, says Allaire, who previously founded and ran an online video-streaming firm called Brightcove, which remains a publicly held company.
“The much more interesting, bigger reasons that we’re doing this are: We want money to work the way the rest of the internet works … the same way that content works, and information works,” Allaire said at a Circle press dinner yesterday in New York, attended by Recode and other publications.
“I can send and receive an email instantly anywhere for nothing, and it works interoperably, no matter what email service I use. … I have a global network of information exchange. That’s really powerful. And we want that to be how money works. And this is a step towards that.”