Circle Internet Financial Limited, a subsidiary of Circle Internet Financial, Inc, has raised funds worth $110 million. Both Bitmain and Circle Internet Financial Limited (CIFL) have partnered in a project to develop a token, which is supported by the US dollars.
The valuation of CIFL has increased to $3 billion in the latest investment initiative. It is almost 6 times that of in 2016. CIFL and Bitmain have entered into a pact to create a stable coin or fiat backed token. The main aim of the stable coin is to alleviate the unstable nature of cryptocurrencies.
The project is known as USDC or Circle USD Coin. CIFL will unveil the project in Summer. It is an ERC-20 token, which is based on Ethereum network. It is an equivalent to the dollar and stable. Therefore, users can enjoy the benefits of the cryptocurrency but without any volatility.
Chief Executive Officer of CIFL, Jeremy Allaire while speaking at a conference on Monday said it will provide more transparency. It is a variant of the fiat and moves at the speed of an Internet. It has worldwide reach and comes with an enhanced security.
The user base of CIFL is estimated at 7 million. The company plans to integrate USDC in a circle trade, and in its Circle Payment App. The USDC will also be offered on Poloniex, its cryptocurrency exchange.
Sean Neville, the co-founder of CIFL said the company has so far not staged a decision to impose the fee for using USDC. Its main aim right now is to increase circulation.
The implementation of Stable Coins like USDC is very easy. It will function just like an IOU. Each of the issued tokens will be paired with fiat currency in equal amount. The investors can easily redeem the stable coins denominated in fiat.
Therefore, investors looking to enjoy the benefits of cryptocurrency and at the same time maintain the stability of the fiat currencies can jump into this trade safely. It is a win-win situation for the holders of the stable coin. However, it requires a system to prevent manipulation by the third party.