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Circle (company)

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Circle Internet Financial Limited
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)
URLcircle.com
LaunchedOctober 2013; 11 years ago (2013-10)

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]

Funding

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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 Clidenor Capital expected to close in the second quarter.[12]

In January 2024, the company filed for a U.S. Initial public offering.[13][14]

History

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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 July 2023, Circle announced layoffs and stated that it had discontinued investments in non-core business areas.[39]

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.[40]

In January 2024, the company filed a confidential S-1 with the Securities and Exchange Commission.[41] The following month, Circle announced it would stop supporting USDC token on the Tron network.[42][43]

According to data compiled by Visa, USDC overtook Tether in stablecoin transaction volume in April 2024.[44]

Services and features

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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.[45] As of 2016, European customers can also use Circle in EUR and GBP.[46] 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.[47] In June 2016, Circle announced it will begin expanding its services to China.[48]

In December 2016 the Circle app stopped supporting the exchange of bitcoin but still allows money transfers.[49] In October 2017, Circle launched a new service for group payments and cash transfers to US accounts.[50][51]

In June 2019 it was announced that the Circle Pay mobile and web apps would be discontinued on September 30, 2019.[52]

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

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On February 26, 2018, Circle announced that they purchased the Poloniex cryptocurrency exchange for $400 million.[53][54]

In October 2018 it was announced that Circle planned to acquire SeedInvest, subject to FINRA (Financial Industry Regulatory Authority) approval.[55] The acquisition was finalized in March 2019.[56][57]

In October 2019, Circle and Poloniex announced their split, with Poloniex establishing itself as a new company named "Polo Digital Asset".[58] It was revealed one month later that Justin Sun, the founder of Tron, led the acquisition of Poloniex.[59]

Licenses

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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.[60]

References

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  1. ^ "Circle Internet Financial, Inc.: Private Company Information - Businessweek". Bloomberg. Retrieved 2016-04-13.
  2. ^ a b Pressman, Aaron (December 17, 2022). "Amid crypto crash, Boston's Jeremy Allaire may be the last person standing". BostonGlobe.com. Retrieved 2023-03-20.
  3. ^ a b c Bambysheva, Nina. "Circle Begs Congress: Please Regulate Us". Forbes. Retrieved 2023-06-12.
  4. ^ Alden, William (March 26, 2014). "Dealbook: Startup Unveils Bitcoin Payments Product". The New York Times. Retrieved April 18, 2014.
  5. ^ Schroeder, Stan (April 30, 2015). "Bitcoin startup Circle raises $50 million from Goldman Sachs and IDG". Mashable. Retrieved 23 Oct 2018.
  6. ^ Casey, Michael J. (April 30, 2015). "Goldman a Lead Investor in Funding Round for Bitcoin Startup Circle". Wall Street Journal. Retrieved 23 Oct 2018.(subscription required)
  7. ^ Popper, Nathaniel (April 30, 2015). "Dealbook: Goldman and IDG Put $50 Million to Work in a Bitcoin Company". The New York Times. Retrieved 23 Oct 2018.
  8. ^ Wang, Selina (2016-06-23). "Circle Raises $60 Million in Funding Round Backed by Baidu, IDG". Bloomberg. Retrieved 23 Oct 2018.
  9. ^ Castillo, Michael del (15 May 2018). "Cryptocurrency Startup Circle Raised $110M For Ethereum Coin Backed By U.S. Dollars". Forbes. Retrieved 2018-05-16.
  10. ^ a b Kate Rooney (15 May 2018). "Goldman Sachs-backed start-up Circle introducing a crypto version of the US dollar". CNBC. Retrieved 25 Oct 2018.
  11. ^ "Crowdcube raises £10m to power European expansion". AltFi. Retrieved 25 July 2022.
  12. ^ "Circle Announces $400M Funding Round". www.prnewswire.com. 12 April 2022.
  13. ^ "Circle confidentially files for US IPO". Reuters.
  14. ^ Sigalos, MacKenzie (2024-01-11). "Circle confidentially files for IPO following banner year for crypto stocks". CNBC. Retrieved 2024-03-18.
  15. ^ Vigna, Paul (September 22, 2015). "Moneybeat: Circle Gets First 'BitLicense,' Releases CirclePay, New Service". Wall Street Journal. Retrieved 23 Oct 2018.(subscription required)
  16. ^ Woodward, Curt (September 22, 2015). "Circle gets first bitcoin license from New York regulators". beta Boston. Archived from the original on 23 September 2015. Retrieved 23 Oct 2018.
  17. ^ NYDFS (September 22, 2015). "NYDFS Announces Approval of First BitLicense Application from a Virtual Currency From a Virtual Currency Firm". ny.gov (press release). Archived from the original on 31 January 2018. Retrieved 23 Oct 2018.
  18. ^ Popper, Nathaniel (2016-04-06). "Bitcoin Start-Up Gets an Electronic Money License in Britain". The New York Times. ISSN 0362-4331. Retrieved 23 Oct 2018.
  19. ^ Nidhi Subbaraman (25 Sep 2015). "Circle's bitcoin app now lets you send cash". beta Boston. Archived from the original on 2015-09-29. Retrieved 2016-04-13.
  20. ^ Alba, Davey (April 30, 2015). "This Digital Wallet Could Finally Get You Into Bitcoin". WIRED. Retrieved 23 Oct 2018.
  21. ^ Alspach, Kyle (March 27, 2014). "Digital currency firm gets $17m in financing". The Boston Globe. Retrieved April 18, 2014.
  22. ^ Swisher, Kara (March 26, 2014). "Still More Bitcoin Investing: Circle Internet Financial Raises $17 Million from Oak, Others". re/code. Retrieved April 18, 2014.
  23. ^ Sean Neville; Jeremy Allaire (2016-12-06). "Spark, New Markets, App Messaging, and Bitcoin Changes". The Circle Blog. Archived from the original on 2016-12-08. Retrieved 2017-06-06.
  24. ^ "Circle wanted to create a financial revolution. Instead, it's losing the stablecoin wars to Tether". Fortune Crypto. Retrieved 2023-11-13.
  25. ^ a b Anna Irrera (15 May 2018). "Circle raises $110 million, plans to create dollar-pegged cryptocurrency". Reuters. Retrieved 25 Oct 2018.
  26. ^ "Circle Joins Ranks of Stable Crypto Coins With Dollar Token". Bloomberg.com. 2018-09-26. Retrieved 2023-11-13.
  27. ^ a b c "USDC to be available on 15 blockchains after adding 6—including Base, Optimism, and Polygon PoS—over next 2 months". Fortune Crypto. Retrieved 2023-09-19.
  28. ^ "Circle Spins Out More Business, Sells 'Invest' to Voyager Digital". Financial and Business News | Finance Magnates. 2020-02-12. Retrieved 2024-04-16.
  29. ^ "Circle Sells Crypto Investing App Business to Voyager Digital". Bloomberg.com. 12 February 2020.
  30. ^ Vigna, Paul (2021-07-08). "Cryptocurrency Operator Circle to Go Public in $4.5 Billion SPAC Merger". Wall Street Journal. ISSN 0099-9660. Retrieved 2021-07-28.
  31. ^ "Crypto group Circle ends $9bn deal to go public through Bob Diamond's Spac". Financial Times. 2022-12-05. Retrieved 2022-12-05.
  32. ^ "Crypto Presence Endures at Davos". WSJ. Retrieved 2023-02-14.
  33. ^ Chowdhury, Divya; Mattackal, Lisa Pauline (2023-01-16). "Davos 2023 New regulatory definitions needed for digital assets -Circle CEO". Reuters. Retrieved 2023-02-14.
  34. ^ Stablecoin Firm Circle Reveals $3.3 Billion Exposure to Silicon Valley Bank. Bloomberg News, 10 March 2023.
  35. ^ "US Bank Crisis Prompts Stablecoin Backer's Flight to Big Lenders". Bloomberg.com. 2023-03-16. Retrieved 2023-03-20.
  36. ^ "Circle Says $1 Billion in Cash Serves as Buffer While Market Share Declines". Bloomberg.com. 2023-08-10. Retrieved 2023-09-19.
  37. ^ "" Le géant des stablecoins Circle choisit Paris pour établir son siège européen "". bfmtv.com (in French). 2023-03-21. Retrieved 2023-03-29.
  38. ^ "Circle Picks Crypto-Friendly France for European Headquarters". 2023-03-21. Retrieved 2023-03-29.
  39. ^ "Crypto firm Circle to cut workforce, focus on core activities".
  40. ^ "Visa to send stablecoin USDC over Solana to help pay merchants in crypto". Fortune Crypto. Retrieved 2023-09-19.
  41. ^ Nina Bambysheva (December 11, 2024). "Circle And Binance Become A Stablecoin Power Couple". Forbes. Retrieved December 15, 2024.
  42. ^ "Stablecoin USDC Ditches Tron Network, Cites Risk Management". Bloomberg. 21 February 2024. Retrieved 2024-03-21.
  43. ^ Wilson, Tom (2024-02-21). "Crypto firm Circle to end support for USDC stablecoin on Tron blockchai". Reuters.
  44. ^ Shukla, Sidhartha (April 29, 2024). "Circle's USDC Takes Lead in Stablecoin Transactions, Visa Says". Bloomberg.
  45. ^ "Which debit and credit cards can I use?". Circle FAQ. Archived from the original on 22 December 2015. Retrieved 15 December 2015.
  46. ^ "Circle and British Pound Sterling, Social Payment App Updates, Limitless Spends and Withdrawals". The Circle Blog. 2016-04-05. Retrieved 2017-06-06.
  47. ^ Popper, Nathaniel (2016-04-06). "Bitcoin Start-Up Gets an Electronic Money License in Britain". The New York Times. ISSN 0362-4331. Retrieved 2016-04-06.
  48. ^ "Dublin-listed Circle gets €54m for China expansion". 28 June 2016.
  49. ^ Fitz Tepper (12 Jul 2016). "Circle removes ability to buy and sell Bitcoin as it doubles down on mobile payments". TechCrunch. Retrieved 2017-02-07.
  50. ^ Adrian Weckler (19 Oct 2017). "Dublin payments firm debuts group transfers - Independent.ie". Independent.ie. Retrieved 2017-10-19.
  51. ^ Kennedy, John (2017-10-19). "Circle reveals group payments and fast, free cash transfers to US accounts". Silicon Republic. Retrieved 2017-10-19.
  52. ^ "Circle Pay Pulls Out of the Mobile Payments Market". 17 June 2019.
  53. ^ Robert Hackett (26 Feb 2018). "This Big Cryptocurrency Acquisition Could Create a Wall Street-Style Financial Giant". Fortune. Archived from the original on 26 February 2018. Retrieved 24 October 2018.
  54. ^ Romain Dillet (February 26, 2018). "Circle acquires cryptocurrency exchange Poloniex". TechCrunch. Retrieved 28 January 2020.
  55. ^ Lily Katz (5 Oct 2018). "Circle to Buy SeedInvest to Help Startups Raise Cash With Crypto". Bloomberg. Retrieved 25 October 2018.
  56. ^ "Crypto Payments Firm Circle Closes Acquisition of Crowdfunding Platform SeedInvest". Yahoo News. 2019-03-04. Retrieved 2024-04-22.
  57. ^ PYMNTS (2019-03-04). "Circle Pay Closes On Acquisition Of SeedInvest". PYMNTS.com. Retrieved 2024-04-22.
  58. ^ "Circle spinning out Poloniex; new exchange plans to spend $100M and not serve US clients". uk.movies.yahoo.com. 2019-10-18. Retrieved 2024-03-25.
  59. ^ "Poloniex Exchange on Twitter". twitter.com. Retrieved 17 December 2020.
  60. ^ "Circle Singapore Gets Digital Payment Token License From MAS". news.bloomberglaw.com. Retrieved 2023-06-12.
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