Circle (company)
Circle (legally Circle Internet Financial Limited) is a peer-to-peer payments technology company that now manages stablecoin USDC, a cryptocurrency the value of which is pegged to the U.S. dollar. It was founded by Jeremy Allaire and Sean Neville in October 2013. Circle is headquartered in Boston, Massachusetts.[1][2] USDC, the second largest stablecoin worldwide, is designed to hold at or near a stable price of $1. The majority of its stablecoin collateral is held in short-term U.S. government securities.[3]
Type of business
Private
Peer to peer payments
Jeremy Allaire, Sean Neville
Jeremy Allaire (CEO)
October 2013
Funding[edit]
The company has received over US$135 million in venture capital from 4 rounds of investments from 2013 to 2016, including US$50 million led by Goldman Sachs.[4][5][6] In April 2015 The New York Times reporter Nathaniel Popper wrote that the Goldman Sachs investment "should help solidify Bitcoin’s reputation as a technology that serious financial firms can work with."[7] In June 2016, Circle raised US$60 million in Series D funding backed by new and existing partners.[8] On May 15, 2018, Circle raised US$110 million in venture capital to create USD Coin, an Ethereum coin they claim is backed by USD.[9][10] Today, each USDC token is backed by USD.[2]
In November 2021 Circle led a US$13.5 million funding round in crowdfunding platform Crowdcube.[11]
In April 2022, Circle Internet Financial announced an agreement for a US$400M funding round with investments from BlackRock, Fidelity Investments, Marshall Wace LLP, Fin Capital and Jet Prive Gestora de Fundos Ltda expected to close in the second quarter.[12]
In January 2024, the company filed for a U.S. Initial public offering.[13][14]
History[edit]
In September 2015, Circle received the first BitLicense issued from the New York State Department of Financial Services.[15][16][17] In April 2016, the British government approved the first virtual currency licensure to Circle.[18]
Circle's mobile payment platform, Circle Pay, allowed users to hold, send, and receive traditional fiat currencies,[19] until being slated for discontinuation in 2019. Up until December 2016, Circle Pay also operated as a Bitcoin wallet service to buy and sell Bitcoins.[20][21][22] It has since ceased to provide such service.[23]
In September 2018, Circle, along with Coinbase Global,[24] released a consortium called Centre, which launched digital USDC pegged to the dollar.[25] Centre was intended to serve as a platform for users to make deposits from traditional bank accounts and convert fiat currency into tokens. Centre would also provide the ability to shift back to banknotes.[26] In August 2023, Coinbase and Circle closed the Centre Consortium, giving Circle sole governance of USDC.[27]
In February 2020, Circle sold its digital asset trading platform to Voyager Digital.[28][29]
In July 2021, Circle announced a plan to merge with a special-purpose acquisition company called Concord Acquisition Corp in a $4.5 billion deal that would make Circle a public company.[30] However, in December 2022 this deal was terminated.[31]
In 2023, at the World Economic Forum's annual meeting in Davos, Switzerland, Allaire said the United States needs new statutory definitions of digital assets to provide regulatory clarity. He also said he hoped Circle will be regulated by the U.S. Federal Reserve and become an established financial player in order to distinguish the company from recent implosions in the crypto industry.[32][33]
On March 10, 2023, USDC Stablecoin announced that $3.3 billion of its US$40 billion Coin reserves were held at Silicon Valley Bank when it collapsed.[34] All of the cash held as reserve has since been parked with The Bank of New York Mellon Corporation.[35] In late 2023, the company announced it had a $1 billion cash cushion.[36] In the same month, the company announced that it had chosen Paris to develop its commercial activities in Europe.[37][38]
In 2023, CEO Jeremy Allaire began lobbying the U.S. Congress to provide clear rules for stablecoins. Analysts have suggested that well-regulated stablecoins would invite competition from mainstream banks and have the potential to disrupt the current remittance, payments, and peer-to-peer transfer system.[3] In late, 2023, Coinbase took an equity stake in the company which also announced that USDC will be available on six additional blockchains.[27] Visa also announced it was expanding a pilot program that uses USDC on the Solana blockchain to help pay some merchants in cryptocurrency.[39]
In February 2024, Circle announced it would stop supporting USDC token on the Tron network.[40][41]
Services and features[edit]
As of 2015, a Circle account could be funded in USD via "US-issued Visa and MasterCard credit and debit cards" and US bank accounts.[42] As of 2016, European customers can also use Circle in EUR and GBP.[43] Circle plans to peg the conversion rate to the US Dollar.[25][10] Britain's Financial Conduct Authority granted Circle an electronic money license in April 2016, expanding the use of Circle's services to the United Kingdom and broadening Circle's relationship with UK bank Barclays.[44] In June 2016, Circle announced it will begin expanding its services to China.[45]
In December 2016 the Circle app stopped supporting the exchange of bitcoin but still allows money transfers.[46] In October 2017, Circle launched a new service for group payments and cash transfers to US accounts.[47][48]
In June 2019 it was announced that the Circle Pay mobile and web apps would be discontinued on September 30, 2019.[49]
In 2023, the company released a protocol that enables users to move USDC between blockchains. It also unveiled a programmable Web3 wallet platform that will enable applications to store, send, and receive cryptocurrencies.[27]
Acquisitions[edit]
On February 26, 2018, Circle announced that they purchased the Poloniex cryptocurrency exchange for $400 million.[50][51] Amid the developments around the acquisition, one of Circle's leaked documents detailing its plans on operating Poloniex revealed the company's moves to become "The US's First Regulated Crypto Exchange" supported by its mutual understanding with the SEC.[52]
In October 2018 it was announced that Circle planned to acquire SeedInvest, subject to FINRA (Financial Industry Regulatory Authority) approval.[53] The acquisition was finalized in March 2019.[54][55]
In October 2019, Circle and Poloniex announced they were splitting and Poloniex announced itself as a new company, “Polo Digital Asset".[56] It was revealed one month later that Justin Sun, the founder of Tron, led the acquisition of Poloniex.[57]