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Circle

Topic: Company

 From HandWiki - Reading time: 9 min
Short description: Peer-to-peer payments technology company
Circle Internet Financial Limited
Circle's new loggo.webp
Type of businessPrivate
Type of site
Peer to peer payments
Headquarters
Boston, Massachusetts
,
United States
Founder(s)Jeremy Allaire, Sean Neville
Key peopleJeremy Allaire (CEO)
Websitecircle.com
LaunchedOctober 2013; 10 years ago (2013-10)

Circle began as 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]

Funding

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 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.[11]

History

In September 2015, Circle received the first BitLicense issued from the New York State Department of Financial Services.[12][13][14] In April 2016, the British government approved the first virtual currency licensure to Circle.[15]

Circle's mobile payment platform, Circle Pay, allowed users to hold, send, and receive traditional fiat currencies,[16] 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.[17][18][19] It has since ceased to provide such service, claiming the company "is now more than ever not a consumer bitcoin exchange, and will continue to focus resources on global social payments and future next-generation blockchain technology".[20]

In September 2018, Circle, along with Coinbase Global,[21] released a consortium called Centre, which launched digital USDC pegged to the dollar.[22] 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.[23] In August 2023, Coinbase and Circle closed the Centre Consortium, giving Circle sole governance of USDC.[24]

In June 2019 it was announced that the Circle Pay mobile and web apps would be discontinued on September 30.[25]

In February 2020, Circle sold its digital asset trading platform to Voyager Digital.[26]

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.[27] However, in December 2022 this deal was terminated.[28]

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.[29][30]

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.[31] All of the cash held as reserve has since been parked with The Bank of New York Mellon Corporation.[32] In late 2023, the company announced it had a $1 billion cash cushion.[33]

In the same month, the company announced that it has chosen Paris to develop its commercial activities in Europe.[34][35]

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.[24] Visa also announced it was expanding a pilot program that uses USDC on the Solana blockchain to help pay some merchants in cryptocurrency.[36]

Services and features

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.[37] As of 2016, European customers can also use Circle in EUR and GBP.[38] Circle plans to peg the conversion rate to the US Dollar.[22][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.[39] In June 2016, Circle announced it will begin expanding its services to China, where CEO Jeremy Allaire believes "there’s an opportunity for Chinese consumers that want to share value globally with friends in other parts of the world."[40]

In December 2016 the Circle app stopped supporting the exchange of bitcoin but still allows money transfers.[41] In October 2017, Circle launched a new service for group payments and cash transfers to US accounts.[42][43]

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.[24]

Acquisitions

On February 26, 2018, Circle announced that they purchased the Poloniex cryptocurrency exchange for $400 million.[44][45] 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.

While Circle announced the exchange would "spin out" in October 2019,[46] it was revealed one month later that Justin Sun, the founder of Tron, led the acquisition of Poloniex.[47]

In October 2018 SeedInvest announced they entered an agreement to sell to Circle, subject to FINRA (Financial Industry Regulatory Authority) approval.[48]Note: This topic belongs to "Economics" portal

Investments

In November 2021 Circle led a US$13.5 million funding round in crowdfunding platform Crowdcube.[49]

Licenses

The company has licenses in 49 U.S. states as well as Puerto Rico and the District of Columbia and does most of its banking with regulated U.S. institutions.[3] in 2023, the company received a Major Payment Institution license from the Monetary Authority of Singapore.[50]

Criticism

On July 9, 2022, author Matt Taibbi released an extremely critical overview of Circle's business practices in his article titled "The Financial Bubble Era Comes Full Circle".[51]

References

  1. ↑ "Circle Internet Financial, Inc.: Private Company Information - Businessweek". https://www.bloomberg.com/research/stocks/private/snapshot.asp?privcapId=249292386. 
  2. ↑ 2.0 2.1 Pressman, Aaron (December 17, 2022). "Amid crypto crash, Boston's Jeremy Allaire may be the last person standing" (in en-US). https://www.bostonglobe.com/2022/12/17/business/amid-crypto-crash-bostons-jeremy-allaire-may-be-last-person-standing/. 
  3. ↑ 3.0 3.1 3.2 Bambysheva, Nina. "Circle Begs Congress: Please Regulate Us" (in en). https://www.forbes.com/sites/ninabambysheva/2023/06/07/circle-begs-congress-please-regulate-us/. 
  4. ↑ Alden, William (March 26, 2014). "Dealbook: Startup Unveils Bitcoin Payments Product". The New York Times. https://dealbook.nytimes.com/2014/03/26/start-up-unveils-bitcoin-payments-product-and-additional-financing/?_php=true&_type=blogs&_r=0. 
  5. ↑ Schroeder, Stan (April 30, 2015). "Bitcoin startup Circle raises $50 million from Goldman Sachs and IDG". Mashable. http://mashable.com/2015/04/30/bitcoin-startup-circle-raises-50-million-dollars. 
  6. ↑ Casey, Michael J. (April 30, 2015). "Goldman a Lead Investor in Funding Round for Bitcoin Startup Circle". Wall Street Journal. https://www.wsj.com/articles/goldman-a-lead-investor-in-funding-round-for-bitcoin-startup-circle-1430363042. (Subscription content?)
  7. ↑ Popper, Nathaniel (April 30, 2015). "Dealbook: Goldman and IDG Put $50 Million to Work in a Bitcoin Company". The New York Times. https://www.nytimes.com/2015/04/30/business/dealbook/goldman-and-idg-put-50-million-to-work-in-a-bitcoin-company.html. 
  8. ↑ Wang, Selina (2016-06-23). "Circle Raises $60 Million in Funding Round Backed by Baidu, IDG". https://www.bloomberg.com/news/articles/2016-06-23/circle-raises-60-million-in-funding-round-backed-by-baidu-idg. 
  9. ↑ Castillo, Michael del (15 May 2018). "Cryptocurrency Startup Circle Raised $110M For Ethereum Coin Backed By U.S. Dollars" (in en). Forbes. https://www.forbes.com/sites/michaeldelcastillo/2018/05/15/circle-raised-110m-to-build-ethereum-coin-backed-by-dollars/#59ec4b3c1ee1. 
  10. ↑ 10.0 10.1 "Goldman Sachs-backed start-up Circle introducing a crypto version of the US dollar". 15 May 2018. https://www.cnbc.com/2018/05/15/goldman-sachs-backed-start-up-circle-introducing-a-crypto-us-dollar.html. 
  11. ↑ "Circle Announces $400M Funding Round" (in en). 12 April 2022. https://www.prnewswire.com/news-releases/circle-announces-400m-funding-round-301523647.html. 
  12. ↑ Vigna, Paul (September 22, 2015). "Moneybeat: Circle Gets First 'BitLicense,' Releases CirclePay, New Service". Wall Street Journal. https://blogs.wsj.com/moneybeat/2015/09/22/circle-gets-first-bitlicense-releases-circlepay-new-service/. (Subscription content?)
  13. ↑ Woodward, Curt (September 22, 2015). "Circle gets first bitcoin license from New York regulators". beta Boston. http://www.betaboston.com/news/2015/09/22/circle-gets-first-bitcoin-license-from-new-york-regulators/. 
  14. ↑ NYDFS (September 22, 2015). "NYDFS Announces Approval of First BitLicense Application from a Virtual Currency From a Virtual Currency Firm". ny.gov. http://www.dfs.ny.gov/about/press/pr1509221.htm. 
  15. ↑ Popper, Nathaniel (2016-04-06). "Bitcoin Start-Up Gets an Electronic Money License in Britain". The New York Times. ISSN 0362-4331. https://www.nytimes.com/2016/04/06/business/dealbook/bitcoin-start-up-gets-an-electronic-money-license-in-britain.html. 
  16. ↑ Nidhi Subbaraman (25 Sep 2015). "Circle's bitcoin app now lets you send cash" (in en-US). http://www.betaboston.com/news/2015/09/25/circles-bitcoin-app-now-lets-you-send-cash/. 
  17. ↑ Alba, Davey (April 30, 2015). "This Digital Wallet Could Finally Get You Into Bitcoin". WIRED. https://www.wired.com/2015/04/circle-bitcoin-digital-wallet/. Retrieved 23 Oct 2018. 
  18. ↑ Alspach, Kyle (March 27, 2014). "Digital currency firm gets $17m in financing". The Boston Globe. https://www.bostonglobe.com/business/2014/03/26/circle-internet-financial-ltd-gets-financing/jpvDrHbV9H3GgNpNJJdUjN/story.html. 
  19. ↑ Swisher, Kara (March 26, 2014). "Still More Bitcoin Investing: Circle Internet Financial Raises $17 Million from Oak, Others". re/code. http://recode.net/2014/03/26/still-more-bitcoin-investing-circle-internet-financial-raises-17-million-from-oak-others/. 
  20. ↑ Sean Neville; Jeremy Allaire (2016-12-06). "Spark, New Markets, App Messaging, and Bitcoin Changes". http://blog.circle.com/2016/12/06/spark-new-markets-app-messaging-and-bitcoin-changes/. 
  21. ↑ "Circle wanted to create a financial revolution. Instead, it’s losing the stablecoin wars to Tether" (in en). https://fortune.com/crypto/2023/09/06/circle-financial-revolution-tether-stablecoin-usdc-banking-crisis/. 
  22. ↑ 22.0 22.1 "Circle raises $110 million, plans to create dollar-pegged cryptocurrency". 15 May 2018. https://www.reuters.com/article/us-crypto-currencies-circle/circle-raises-110-million-plans-to-create-dollar-pegged-cryptocurrency-idUSKCN1IG38R. 
  23. ↑ "Circle Joins Ranks of Stable Crypto Coins With Dollar Token" (in en). Bloomberg.com. 2018-09-26. https://www.bloomberg.com/news/articles/2018-09-26/circle-joins-ranks-of-stable-crypto-coins-with-dollar-token. 
  24. ↑ 24.0 24.1 24.2 "USDC to be available on 15 blockchains after adding 6—including Base, Optimism, and Polygon PoS—over next 2 months" (in en). https://fortune.com/crypto/2023/08/23/usdc-base-cosmos-near-optimism-polkadot-polygon-pos-circle/. 
  25. ↑ "Circle Pay Pulls Out of the Mobile Payments Market". 17 June 2019. https://paymentweek.com/2019-6-17-circle-pay-pulls-out-of-the-mobile-payments-market/. 
  26. ↑ "Circle Sells Crypto Investing App Business to Voyager Digital". Bloomberg.com. 12 February 2020. https://www.bloomberg.com/news/articles/2020-02-12/circle-sells-crypto-investing-app-business-to-voyager-digital. 
  27. ↑ Vigna, Paul (2021-07-08). "Cryptocurrency Operator Circle to Go Public in $4.5 Billion SPAC Merger" (in en-US). Wall Street Journal. ISSN 0099-9660. https://www.wsj.com/articles/cryptocurrency-operator-circle-to-go-public-in-4-5-billion-spac-merger-11625754758. 
  28. ↑ "Crypto group Circle ends $9bn deal to go public through Bob Diamond's Spac". Financial Times. 2022-12-05. https://www.ft.com/content/c414257e-a917-4e2b-a022-572268d77515. 
  29. ↑ "Crypto Presence Endures at Davos" (in en). https://www.wsj.com/livecoverage/davos2023/card/crypto-presence-endures-at-davos-vIXWDYVKv3FF8Jn1r9zE. 
  30. ↑ Chowdhury, Divya; Mattackal, Lisa Pauline (2023-01-16). "Davos 2023 New regulatory definitions needed for digital assets -Circle CEO" (in en). Reuters. https://www.reuters.com/technology/davos-2023-new-regulatory-definitions-needed-digital-assets-circle-ceo-2023-01-16/. 
  31. ↑ Stablecoin Firm Circle Reveals $3.3 Billion Exposure to Silicon Valley Bank. Bloomberg News, 10 March 2023.
  32. ↑ "US Bank Crisis Prompts Stablecoin Backer's Flight to Big Lenders" (in en). Bloomberg.com. 2023-03-16. https://www.bloomberg.com/news/articles/2023-03-16/us-bank-crisis-prompts-stablecoin-usdc-backer-s-flight-to-big-lenders. 
  33. ↑ "Circle Says $1 Billion in Cash Serves as Buffer While Market Share Declines" (in en). Bloomberg.com. 2023-08-10. https://www.bloomberg.com/news/articles/2023-08-10/circle-usdc-stablecoin-issuer-says-1-billion-cash-to-counter-paypal-binance. 
  34. ↑ "" Le géant des stablecoins Circle choisit Paris pour établir son siège européen "" (in fr). bfmtv.com. 2023-03-21. https://www.bfmtv.com/crypto/le-geant-des-stablecoins-circle-choisit-paris-pour-etablir-son-siege-europeen_AV-202303210413.html. 
  35. ↑ "Circle Picks Crypto-Friendly France for European Headquarters" (in En). 2023-03-21. https://www.bloomberg.com/news/articles/2023-03-21/circle-picks-crypto-friendly-france-for-european-headquarters?sref=gu9RiAAZ#xj4y7vzkg. 
  36. ↑ "Visa to send stablecoin USDC over Solana to help pay merchants in crypto" (in en). https://fortune.com/crypto/2023/09/05/visa-stablecoin-usdc-solana-worldpay-nuvei-merchants-payments/. 
  37. ↑ "Which debit and credit cards can I use?". https://support.circle.com/hc/en-us/articles/205382324-Which-debit-and-credit-cards-can-I-use-. 
  38. ↑ "Circle and British Pound Sterling, Social Payment App Updates, Limitless Spends and Withdrawals". 2016-04-05. http://blog.circle.com/2016/04/05/circle-and-british-pound-sterling-social-payment-app-updates-limitless-spends-and-withdrawals/. 
  39. ↑ Popper, Nathaniel (2016-04-06). "Bitcoin Start-Up Gets an Electronic Money License in Britain". The New York Times. ISSN 0362-4331. https://www.nytimes.com/2016/04/06/business/dealbook/bitcoin-start-up-gets-an-electronic-money-license-in-britain.html. 
  40. ↑ "Dublin-listed Circle gets €54m for China expansion". https://www.independent.ie/business/technology/news/dublinlisted-circle-gets-54m-for-china-expansion-34838867.html. 
  41. ↑ Fitz Tepper (12 Jul 2016). "Circle removes ability to buy and sell Bitcoin as it doubles down on mobile payments" (in en-US). https://techcrunch.com/2016/12/07/circle-removes-ability-to-buy-and-sell-bitcoin-as-it-doubles-down-on-mobile-payments/. 
  42. ↑ Adrian Weckler (19 Oct 2017). "Dublin payments firm debuts group transfers - Independent.ie" (in en). Independent.ie. http://www.independent.ie/business/technology/news/dublin-payments-firm-debuts-group-transfers-36240386.html. 
  43. ↑ Kennedy, John (2017-10-19). "Circle reveals group payments and fast, free cash transfers to US accounts" (in en-GB). Silicon Republic. https://www.siliconrepublic.com/start-ups/circle_us_p2p_fintech_payments. 
  44. ↑ "This Big Cryptocurrency Acquisition Could Create a Wall Street-Style Financial Giant". 26 Feb 2018. http://fortune.com/2018/02/26/circle-cryptocurrency-trade-bitcoin/. 
  45. ↑ "Circle acquires cryptocurrency exchange Poloniex". February 26, 2018. https://techcrunch.com/2018/02/26/circle-acquires-cryptocurrency-exchange-poloniex/. 
  46. ↑ "Poloniex to Spin Out of Circle". https://www.circle.com/blog/poloniex-to-spin-out-of-circle. 
  47. ↑ "Poloniex Exchange on Twitter". https://twitter.com/Poloniex/status/1194282581908447232. 
  48. ↑ "Circle to Buy SeedInvest to Help Startups Raise Cash With Crypto". 5 Oct 2018. https://www.bloomberg.com/news/articles/2018-10-05/circle-to-buy-seedinvest-to-help-startups-raise-cash-with-crypto. 
  49. ↑ "Crowdcube raises £10m to power European expansion". https://www.altfi.com/article/8573_crowdcube-raises-10m. 
  50. ↑ "Circle Singapore Gets Digital Payment Token License From MAS" (in en). https://news.bloomberglaw.com/crypto/circle-singapore-gets-digital-payment-token-license-from-mas. 
  51. ↑ Taibbi, Matt (2022-07-09). "The Financial Bubble Era Comes Full Circle". https://taibbi.substack.com/p/the-financial-bubble-era-comes-full. 

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