A new USD-pegged cryptocurrency known as a ‘stablecoin’ is in the latest cryptocurrency news, this time issued by the $3 billion Bitcoin startup Circle that is backed by the investment banking giant Goldman Sachs. The stablecoin will basically represent another altcoin whose value is pegged to the U.S. dollar and backed by physical currency stored in company-owned bank accounts.
Named USD Coin (USDC), the coin will allow individuals and institutions to tokenize physical currency for use in overseas trading as well as other cross-border transactions in need of rapid settlement.
The co-founders of Circle, Jeremy Allaire and Sean Neville, expressed their excitement about the new announcement, stating:
“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.”
However, this is not the first time the market is hearing about Circle’s stablecoin. USDC was previewed back in May this year, in tandem with the announcement that the company (Circle) achieved a $3 billion valuation following the Series E funding led by the Bitcoin mining giant Bitmain.
Unlike most of the other USD-backed stablecoins, Circle will not be the only issuer of USD Coin. Instead, the token will have multiple users in the future – as more organizations join CENTRE, which is an open-source consortium launched to develop a decentralized network of fiat stablecoins.
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