Circle Cedes Bitcoin Trading to Coinbase, Expands Messaging Functions

  • Philip Ryan
  • 3 Months ago
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circle-to-coinbaseStill want to buy some bitcoin? It’ll currently cost you about $764, and your options for places to do so are dwindling.

The currency exchange service Circle will no longer facilitate the buying and selling of bitcoins, the company announced in a blogpost yesterday. Instead, those functions will be handled by former rival and now “preferred partner” Coinbase, which recently evolved from a bitcoin wallet to full-fledged bitcoin exchange.

The news comes just days after the OCC said it would grant limited licenses to fintech companies to function as regulated banking institutions. Circle CEO Jeremy Allaire commented positively on the ruling in New York Times.

circlepay2Circle also announced the launch of a blockchain protocol called Spark, “to facilitate trusted, compliant money transfers between participating individuals and institutions over the Bitcoin network,” according to the release. Spark is further described in this way:

… a set of protocol additions that provides a way for digital wallets to exchange value using blockchains, including Bitcoin, as settlement layers. There are many use cases for the technology, but the initial focus is on connecting digital wallets around the world while ensuring that full KYC/AML and compliance requirements can be met, and presenting a seamless experience that reflects local currency exchange rates and conversion rule contracts.

Messaging is increasing in importance for Circle, which has long emphasized the social aspects of payments. From the release:

The Circle Pay apps are now organized around people instead of solely by transactions. All payments to and from an individual exist in an ongoing conversation with that person, similar to popular messaging apps such as WeChat, Messenger and WhatsApp. This mirrors our support for Circle social payments natively inside of Apple iMessage on iOS 10.

Circle has been moving away from being a “bitcoin app” for a long time — today it has completed that journey. Going forward, the company writes, “Circle will continue to be a leading participant in the digital currency markets and ecosystem, with our focus on getting more digital wallets to adopt public blockchains as open transaction settlement networks.”

Cirlce has raised $136 million, according to Crunchbase, and operates in the U.S., some European countries, China, and as of yesterday;s announcement, South Korea and the Philippines.

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Philip Ryan is Associate Editor of Bank Innovation. He worked as a web developer for the Fund for the City of New York for six years, and was an HTML developer at Ocean-7 Development back in the go-go ’90s. He has more than 15 years' experience in online journalism. He can be reached at pryanrmg1@gmail.com.

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