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April 29, 2015

New Circle Investors, New US Dollar Account Features, China Horizons

Today we announced a major step forward in the execution of our vision and product strategy. We've closed a new $50 million strategic investment round co-led by Goldman Sachs and IDG Capital Partners.

And for the first time, we're giving Circle customers the ability to hold, send, and receive US dollars as well as bitcoin -- instantly, securely, and with no fees. In addition to sending and receiving dollars, customers can also enjoy the benefits of the Bitcoin network without the risk of price volatility.

New Investors

Goldman Sachs and China-based IDG Capital Partners were joined by all of Circle’s existing investors in the round, including Breyer Capital, General Catalyst Partners, Accel Partners, Oak Investment Partners, Fenway Summer, Digital Currency Group, Pantera Capital, and strategic individuals.

We could not be happier with our new strategic investors. They bring unique, powerful capabilities and capital that will help us continue building a new kind of global consumer finance company, one based on open platforms, open source software, and ubiquitous mobile devices.

Why did Goldman Sachs invest in Circle?

Tom Jessop is a Managing Director in Goldman Sachs’ Principal Strategic Investments Group. That group focuses on strategic investments and related business development initiatives within the financial technology space. Commenting on the investment, Mr. Jessop explains:

“As the financial services industry continues to become more digital and open, we see significant opportunities in companies and solutions that have the promise to transform global markets through technical innovation. We think that Circle’s product vision and exceptional management team present a compelling opportunity in the digital payments space.”

What is the Connection to China?

IDG Capital Partners likewise brings a strategic capability to Circle as we bring our products and services to China. We believe in a hybrid digital economy in which value moves freely around the world and converts into other currencies -- including both crypto and fiat currencies -- seamlessly, safely, and instantly. People will transact and trade both locally and across the globe more freely and more securely than has ever before been possible. And that means growing our platform to include important economies and currencies such as US Dollars and Chinese Yuan.

IDG Capital Partners, a leading China-based venture capital firm, brings an exceptional and long history of investing in Chinese Internet and consumer tech companies, including Tencent, Baidu, Ctrip, CreditEase, and Xiaomi, and an even longer history in helping Western companies navigate and bring products and services to the China market.

Quan Zhou, Managing Director of IDG Capital Partners and Circle board member, explains:

*"Consumer finance is undergoing a profound transformation with the rise of mobile payment applications and a growing appetite for financial products from non-traditional providers. We feel that Circle is strongly positioned to capitalize on these trends. We are very excited about our investment and look forward to helping launch the company in the Chinese market where consumer adoption of innovative digital payment products is growing at a tremendous rate." *

China is today the center of innovation in mobile apps and digital finance. We have a lot to learn from them, and we’re excited to bridge the dollar economy to the yuan economy using global digital currency. This will take time, as companies and services like Circle’s must address a complex and evolving legal and regulatory landscape in China.

New Dollar Features

We’re also introducing new US dollar features that enable customers to hold, send, and receive dollars. Customers with dollar accounts gain all of the benefits of digital currency -- instant, secure and free payments to anyone in the world -- without holding or explicitly converting dollars into bitcoins. Dollar account balances held by Circle customers are FDIC-insured.

Circle’s robust support for Bitcoin also gets even better. If customers choose to hold dollars instead of bitcoin balances, they can still pay any person or merchant who accepts payment in bitcoin, without ever holding bitcoin themselves. Circle will handle instant conversion from dollars into bitcoin at the time of the payment. The reverse is also true: customers can accept bitcoin and expect Circle to convert it instantly into dollars in their Circle accounts. This gives customers the benefits of bitcoin payments without the risk of price volatility.

This way, customers can choose to view Bitcoin not as a new currency to replace the dollar, but as an Internet payment network that enables secure, instant, global and nearly free payments.

However, those who wish to view Bitcoin as an asset and hold bitcoins with Circle may still do so: Customers holding bitcoin balances will enjoy our full insurance from hacking, data penetration, and other theft; free settlements; robust smartphone apps and excellent support and service.

Whether customers choose to hold dollars or bitcoins, they can send and receive either one, and they can deposit and withdraw their Circle balances to their external bitcoin wallets as well as to their U.S. bank accounts and credit/debit cards.

When can I start using US Dollar capabilities in Circle?

We are enabling customer accounts selectively, and we will add more every week until the feature is generally available. We’re looking forward to your feedback!

-– Jeremy Allaire & Sean Neville

 
 

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