Circle (Financial Services Company)

What Is Circle?

Circle is a Boston-based financial services company that utilizes blockchain technology for its peer-to-peer payments and cryptocurrency- related products. It was begun in 2013 by Jeremy Allaire, who recently established Brightcove, a video platform company, and Sean Neville.

Circle began as a consumer peer-to-peer cryptocurrency payments and exchange platform, supporting the well known cryptocurrency exchange Poloniex after the exchange experienced hardship in 2017, which was later turned out in October 2019.

In 2016 the company stopped offering its cryptocurrency wallet services. In June 2019, it was announced that Circle Pay mobile and related web apps would be discontinued. In 2020, the company's center moved to its stablecoin as "programmable dollars" for business use. In 2021, Circle was acquired by Concord Acquisition Corp., a special purpose acquisition company (SPAC), in a deal valued at $4.5 billion. The deal will take the company public in late 2021 under the ticker symbol 'CRCL'.

How Circle Works

Circle's website states that its mission is to change the global economy. The company's most memorable product was an app called Circle Pay. The app was a bitcoin trading exchange. In September 2015, Circle Pay was conceded a BitLicense, New York state's license for operating bitcoin exchanges.

In May of 2021, the company announced it had brought $440 million up in financing from institutional and strategic investors. In 2018, Circle had brought $110 million up in venture capital to make a stablecoin on Ethereum coin backed by U.S. dollars, known as USD Coin (USDC).

The U.K's. Financial Conduct Authority (FCA) without a doubt Circle an electronic money license. In December 2016, Circle Pay's center moved to peer-to-peer payments or "global social payments." Circle likewise sent off an open-source software project in 2017 to advance payment technology.

The Circle App

Circle's principal product was an app called Circle Pay that empowered instant and free money transfers between people. The service was like Paypal's Venmo in that it very well may be utilized for daily transactions, for example, splitting feast costs or making rent payments.

The Circle Pay app was well known with Millennials in Europe. As per the company, 90% of its European customers in 2017 were below 35 years old, and 60% were more youthful than 25 years of age. In June 2017, Circle Pay announced the integration of a free money transfer service between the United States and Europe.

While reporting the send off, Circle pioneer Allaire said the company was working towards understanding its vision of no qualification among international and domestic money transfers.

The circle app is not generally supported.

Open-Source Blockchain Toolkit

Circle's open source project is called Center and is named after the Cent Routing Exchange protocol it utilizes. Transfers inside the app happen utilizing Center tokens (CENT), an Ethereum token. The project empowers transfers between consumer digital wallets that support different currencies. It is additionally expected to help financial services companies to consent to existing regulations, like Know Your Customer (KYC) and Anti-Money Laundering (AML), by empowering disclosure.

The project supports transfers in numerous countries around the world. For instance, a client in the U.K. can switch British pounds over completely to Korean won and transfer them to a digital wallet client in Korea utilizing the app. Focus currently runs on Ethereum's blockchain yet is intended to run on other blockchains too.

How Does Circle Make Money?

Circle's products are freely accessible in app stores, and the company doesn't charge fees for transactions or transfers. It brings in money through the trading of bitcoin and other cryptocurrencies in over-the-counter (OTC) markets and at digital exchanges.

In an August 2017 tweet, Allaire said Circle was the second greatest crypto asset trader in the world. The company trades in bitcoin and ether and is a market maker on every single major exchange. It likewise gives OTC liquidity services to institutions. Later on, it might send off products that generate revenue.

"We will have future, more significant level products that we completely expect to be revenue-creating, yet this first fundamental product should be free," prime supporter Sean Neville stated in a 2014 blog entry.

Circle additionally acquires revenue from the reserve balances that it holds for its customers. The company contributes their clients' balances and pays them interest from those investments however takes a portion of the rate as revenue by means of an interest rate spread.

Circle's Business Strategy

Circle handled $1 billion in transactions each month starting around 2017, as per a statement from Allaire. It entered China, an enormous market for payment apps, starting in 2016. The company's concentration in China is to "associate Chinese consumers to the remainder of the world" by empowering the flow of payments going out or into China. For instance, it could all the more effectively work with money transfer operations for Chinese understudies concentrating abroad.

Circle's technology of utilizing blockchain-based tokens is like that of Ripple, which is another company centered around decreasing the cost of international money transfers. Notwithstanding, both apps target different markets. Ripple is working with banking institutions to execute its technology.

Features

• Initially a consumer-confronting P2P payment and cryptocurrency wallet and exchange app, the company has since pulled together on commercial blockchain and crypto applications.
• Circle is a blockchain-centered financial services and payments company sent off in 2013.
• Circle sent off a stablecoin in 2018 known as USD Coin, backed by $1 or asset with equivalent, fair value.