Circle Says Bitmain Leads $110 Million Investment Round

Circle Internet Financial Ltd. closed a funding round led by Bitcoin mining giant Bitmain Technologies Ltd. for $110 million — and now it wants to build a better U.S. dollar.

The closely held mobile payments and cryptocurrency trading firm said the investment raises its valuation to about $3 billion, from a reported $480 million in 2016. Bitmain and Circle are now partners in a venture to create fiat-based digital tokens, the first of which will be backed by U.S. dollars and issued by Circle in the summer.

The tokens will be the latest in a growing number of so-called stable coins, which are meant to carry all the benefits of cryptocurrencies, but not the volatility. Circle’s USD Coins, or USDC, will be backed one-to-one to the dollar, with the greenbacks to be stored in auditable bank deposits and redeemable by verified buyers.

“It’s a version of fiat that can move at the speed of the Internet with global reach, with much less cost, with high levels of security,” Circle Chief Executive Officer Jeremy Allaire said in an interview at an industry conference Monday. “It’s a huge improvement for how fiat money transmission can work around the world for consumers and for businesses who might want to collect digital payment with tokens.”

The Boston-based company, which has 7 million users, plans to incorporate USDC in its Circle Pay payment app and in Circle Trade, which provides market-making services, as well as offer it in its cryptocurrency exchange Poloniex.

USDC will be an ERC-20 token, based on the Ethereum network. Plans are for the Centre Foundation, which controls who can issue new fiat-backed tokens, to be independent but is controlled by Circle. Bitmain is currently the only other member.

Investors in previous funding rounds include Goldman Sachs Group Inc., Baidu Inc. and investment bank China International Capital Corp.

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