- Circle has raised $110M in venture capital led by Bitmain
- Circle plans to spend the money developing US Dollar Coin, a stablecoin
- Circle is valued at around $3B with this latest raise.
Why Does This Matter?
This is the largest equity raise by a cryptocurrency startup. It surpasses the $107MM raised by R3 last year. Circle continues to offer a diverse and strong product offering. Circle offers services such as trading a variety of cryptocurrencies and paying your friends with cryptocurrency or fiat money. The addition of a stablecoin is another positive step in the right direction for their business. I've been pessimistic against stablecoins so far. While I would love to see one succeed, I think the chances are low just because of simple economics. If you run out of money, what props the coin up. Circle's attempt at a stablecoin is quite sensible. It's a fully-reserved coin. This means that for every 1 US Dollar Coin, it'll be backed by $1 USD. It's a 1:1 backing. This is also how Tether is supposed to work, but I doubt this is how they work in practice (I am speculating). It's good to see a company that has the means and infrastructure to compete with Coinbase. It's very much needed.
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