Circle launches dollar-backed stablecoin “USD Coin”

Blockchain-based payments startup Circle, in collaboration with CENTRE, has introduced a new fiat-backed stablecoin “USD Coin” or USDC.

In an online post, Circle co-founders Sean Neville and Jeremy Allaire said that the new service will tokenize US dollars and use those dollars over public blockchain.

“A safe, transparent and trustworthy layer for fiat to operate over open blockchains and within smart contracts is a necessary precondition to the broader and more revolutionary potential of a crypto-powered global economy. USDC aims to meet this need,” they said.

CENTRE, which was unveiled by Circle last October, raised $20 million in an initial funding through Simple Agreement for Future Tokens (SAFT) sale in December 2017. The consortium is working on defining standards and policies for fiat stablecoins as well as enforcing a governance scheme for issuers of CENTRE-enabled technology, Neville and Allaire said.

CENTRE expects to deliver several fiat tokens and USDC, an ERC-20 token, is just the first of many. Circle is the first to launch USDC issuance.

The token is available for immediate use on Circle Poloniex and Circle Trade. In addition, over 20 companies have also announced their support for USDC. The USDC ecosystem currently comprises of BitPay, BitGo, Coinbase Wallet, Coinfirm, Circle, DigiFinex, Ledger, KuCoin, and many others.

“Individuals and institutions can enroll in this service to deposit US dollars from bank accounts, convert those dollars into tokens usable everywhere the internet reaches (subject to the token’s compliance controls), and redeem USDC tokens and cash out to bank accounts,” the blog post said.

Earlier this month, The New York State Department of Financial Services (NYDFS) authorized Gemini Trust Company and Paxos Trust Company to offer stablecoin, pegged to the U. S. dollar.