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Circle Integrates zkSync for USD Coin

Circle, one of the largest stablecoin producers, has expanded its support for Ethereum’s layer-2 solution zkSync to include its own stablecoin, USD Coin (USDC). This integration expands the possibilities for Ethereum developers and users, letting them to benefit from zkSync’s zero-knowledge proofs and rollup technology. Increasing the Reach of USD Coin With the inclusion of zkSync, USDC is now available on 16 blockchains, including Ethereum, Solana, Base, Arbitrum, and more. This extension allows developers to build on a stable foundation provided by Circle, assuring the reliability and sustainability of their apps and services. Leveraging zkSync’s technology zkSync uses zero-knowledge proofs and rollups to execute transactions on layer 2 of the Ethereum network with record speed and low cost. Zero-knowledge proofs enable the evaluation of transaction integrity without disclosing the underlying data, guaranteeing privacy and security. Rollups combine many transactions from the Ethereum core layer into a single transaction, which increases scalability and lowers costs.The integration of zkSync with USDC offers a number of advantages for organisations and developers:1. Quick and low-cost transactions Using zkSync’s unique data compression mechanism, developers may enjoy low-cost transactions on the Ethereum network. This scaling solution greatly decreases petrol expenses and increases transaction throughput, making it more affordable to both individuals and companies.2. Improved security and privacy. zkSync’s zero-knowledge proofs give cryptographic assurances of transaction validity, assuring the transaction’s integrity. This increased security feature is critical for banking apps and DeFi protocols, where trust and privacy are essential.3. Native Account Abstraction Developers may use zkSync’s built-in account abstraction to perform social wallet recovery, subscription payments, and network fee payments in USDC. This functionality improves user experiences and broadens the use cases for USDC in the Ethereum ecosystem.Growing the zkSync ecosystemAs of April 9, 2024, the zkSync ecosystem has over 180 decentralised apps and 5.7 million unique active wallet addresses over the previous 30 days. This rising development and user community illustrates that layer-2 solutions like zkSync are becoming more popular and in demand.Circle’s commitment to Ethereum’s futureCircle’s integration of zkSync with USDC is consistent with its aim of increasing Ethereum’s throughput while maintaining its core ideals of freedom, self-sovereignty, and decentralisation at scale. Circle aspires to foster innovation and development within the Ethereum ecosystem by offering access to a reliable and scalable infrastructure for developers and companies alike.Conclusion Circle’s adoption of zkSync to its native stablecoin, USD Coin, is another key step towards the establishment of the Ethereum layer-2 ecosystem. zkSync’s zero-knowledge proofs and rollup technologies provide developers with a strong platform for rapid, low-cost transactions and better security. This integration underlines Circle’s commitment to Ethereum’s future and its objective of boosting scalability while maintaining the network’s essential principles.

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US Declares China a 'Currency Manipulator' while Bitcoin Sees Growth

The US Declares China a ‘Currency Manipulator’

The US Treasury Department officially designated China as a “currency manipulator” on Monday following the most significant stock market losses the US has seen in 2019. There was a 2.9% plunge overnight in the Dow Jones Industrial Average, Nasdaq down 3.4% while Bitcoin is up 3.2% as tweeted by Tim Draper.

In a Tweet posted by Donald Trump, he mentioned that China deliberately weakened the Yuan to “steal our businesses and factories, hurt our jobs, depress our workers’ wages and harm our farmers’ prices.”

China allowed the Yuan to sink below 7 to the US dollar, to its lowest level in 11 years to retaliate for US threats of new tariffs on Chinese products. Beijing announced that it would suspend purchases of US agricultural goods.

No country has been officially named a “currency manipulator” by the US since 1994 by Bill Clinton towards China. Under the law established in 1998, the Treasury Department must name any countries that it finds to be using their legal tender to gain trading advantages over the US.

Bitcoin’s Growth Is Due to an Inflow of Chinese Capital

CEO of Circle Jeremy Allaire suggested that this growth was due to an inflow of Chinese capital, given the correlation between Bitcoin’s gains and the sinking of the Yuan. Although Bitcoin is not easily accessible in China, many investors go through offshore firms to make purchases.

Chart showing BTC/RMB, Bitcoin’s surge after Trump’s announcement. Chart via CoinGecko

China banned all crypto-related activities in 2017 as there was a wave of initial coin offerings. Recently, China has been softening its stance on cryptocurrencies, as it was announced in a court in Hangzhou that Bitcoin is virtual property.

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Crypto Tax Payments Permitted in Bermuda

Circle, a worldwide financial services firm, revealed on Oct.16th that Bermuda has started accepting tax payments using its stablecoin known as USD Coin (USDC).

This undertaking is a part of a broader strategy by the Bermuda administration to utilize decentralized financial services and protocols, as well as the United States dollar-backed stablecoins.

Circle CEO and co-founder Jeremy Allaire noted:

“Bermuda’s Premier made a broader announcement today about embracing stablecoins as the future of the financial system, with a focus on innovations in fintech that can deliver value not just for Bermudians, but also globally via company’s licensed under their Digital Asset Business Act.”

Presently, Bermuda’s economy is dependent on the United States dollar to back up its Bermudian dollar. Allaire, therefore, trusts that this approach will be instrumental in ensuring that USDC is embraced in governmental services.

Circle also acknowledged that the company had been given a “Class F” license under Bermuda’s 2018 Digital Assets Business Act (DABA). It has, therefore, been claimed that this accreditation makes the firm the first-ever primary wallet service and cryptocurrency exchange provider to be given such a permit.

Allaire proclaimed:

“Through the DABA, Bermuda is one of the first countries in the world to create a comprehensive regulatory framework for digital currency and digital asset-based products and services, including licensing of firms operating payment systems using stablecoins. It will be interesting to see how other governments will respond to this fundamental innovation.”

In 2018, USDC was established based on a partnership between Circle and Coinbase.

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Circle's New APIs Simplify Complex Crypto Concepts For Mass Institutional Adoption

Circle, the main stablecoin leveraged by Coinbase, has expanded its services to programmable functionality of its USDC stablecoin.

Circle revealed three new APIs for businesses in a blog post on March 10. The new tools for developers are aimed to facilitate the use of USDC by traditional businesses and additionally create a digital replacement to traditional fiat channels. API tools allow software developers to build on top of and interact with an application.

Programmable Dollars For Business

The first API update, Circle’s Payments API, facilitates the use of credit card and debit card payments by businesses to then settle payments in USDC. This should greatly expedite the time it takes for businesses to receive funds from weeks to days.

Circle will also allow its users to receive cryptocurrency payments without running nodes via its Wallets API. This API provides a simplified layer of familiarity for traditional business to effectively leverage complex concepts in cryptocurrency such as gas fees or private keys.

Finally, Circle’s Marketplace API allows customers to use USDC in other ways. For example, businesses can use the API to “top up” customer funds, enable peer-to-peer payments, or pay suppliers.

In the blog post, Jeremy Allaire, CEO, Circle said, “Until recently, for a business to take advantage of this infrastructure it has often been complicated and confusing. Crypto wallets, exchanges, blockchain transaction management, gas fees, private key security, banking connectivity, and compliance hassles have all been technical and operational impediments to the average internet business jumping into digital currency.”

Circle is currently offering early access APIs, but production APIs are on the way.

A Catalyst for Institutional Adoption

With the launch of the new APIs, Circle aims to simplify the world of digital payments so that company can setup and begin using an account with the same ease that they might open a business bank account.Allaire said “Companies should be able to then easily upload their dollars to the internet, convert them into digital currency dollars, and start storing and using these stablecoins for everyday payments.”

Circle Sold OTC Business to Re-focus on Stablecoins

As reported by Blockchain.News on Dec 18, Circle had announced that they would approach 2020 with a renewed deep focus on stablecoins and the powerful potential they hold for people, enterprises, and governments globally.

On Dec. 17, the founders of Circle announced in a blog post, the sale of its Circle Trade OTC business to Kraken. Spokespersons from Circle stated that they are confident that Kraken will continue to deliver a best-in-class OTC liquidity service to its former customers.

Along with the sale of the OTC business, Circle made a number of organizational changes to help align their operation and talent to match its stablecoin platform service focus and future roadmap. Notably among these changes was the successful sale and restructuring of Poloniex, its exchange business, to a standalone company backed by an Asian investment group. It appears that Cirlce has made good on their goal to focus on moving forward by building on Circle’s core services which support its stablecoin. At the time Allaire said, “These APIs will be offered as services to businesses and developers everywhere who will be able to take advantage of the innovation and efficiency of stablecoins without the cost, complexity, and risk of implementing this infrastructure themselves.”

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MakerDAO May Onboard USDC as DAI Collateral Support to Combat Mounting Liquidity Risk

The share plunge of the cryptocurrency market has severely hit MakerDAO, the leader in the decentralized finance (DeFi) ecosystem. Last week its market value fell sharply from 889M to $246M which brought together Maker’s developer community who have recently discussed adding support for Circle’s USDC as collateral to hedge against the liquidity risk.

MakerDao Foundation’s Developer Team hosted a public meeting this morning where the discussion focused on the code on the collateral adaptor for USDC.

According to the official thread, adding the stablecoin as collateral will help to create liquidity for Maker’s Dai stablecoin and push the Dai peg back towards $1 – “The mechanism of this looks like: Lock USDC -> Mint Dai -> Sell for USDC -> Repeat.”

The thread also states USDC collateral, “ Will allow Vault Holders to close their Vaults without eating the loss on the Dai peg being high against USD.”

Diluted DAI

First on the list of the author’s perceived negatives of adding USDC support would be the reduced decentralized purity of Maker’s Dai. Introducing a US dollar backed stablecoin could also hold a regulatory risk and may result in Circle blacklisting the locked up collateral due to KYC concerns.

During the call, a MakerDAO representative dismissed the Dai dilution argument stating, “ DAI is decentralized because there is no central authority that mints or custodies or approves people’s access to it. The individual does all of it for themselves, that’s why the community is driving the parameters of the systems (per the discussions in forum).”

The representative emphatically summarised, “To say that DAI is not decentralized because of some of the assets that might back it would be erroneous.”

Finding a New Peg for Dai

As reported by Blockchain.News on March 13, following the global stock market crash, the price of multi-collateral DAI (MCD) lost the dollar peg and reached USD 1.07.

To restore the pegging between MCD and USD, the MakerDAO community also has proposed the reduction of DAI Saving Rate (DSR) which brings more DAI in circulation and thus moving the DAI price closer to the $1 peg.

The Maker Foundation have confirmed that they are now making the technical preparations to onboard Circle’s USDC as collateral, but no strategy to restore Dai’s peg has received a confirmation vote yet from Maker’s governance council.

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Biden's Administration "Will Ultimately Be Supportive" of Bitcoin, says Circle CEO

Jeremy Allaire, the Co-Founder, and Chief Executive Officer of Circle, the blockchain firm behind the USDC Stablecoin has given his opinion on his expectations of the Biden administration in relation to providing the right regulations to support Bitcoin. Speaking in an interview on CNBC Squawk Box, Jeremy said that he believes the Biden era will likely be more friendly to digital currencies and their inherent opportunities.

When asked by the host of the program whether he thinks the incoming administration will be positively predisposed to cryptocurrencies or if he thinks the entire space will be tightly regulated, Jeremy answered by saying:

“They will ultimately be supportive because this is an infrastructure change as big as the initial commercial Internet.”

He added that the Biden administration will focus on the digital currency space as they are keen on developing the country’s infrastructure. He also submitted that the focus of the coming government will be targeted at making the digital currency space more competitive.

Biden’s Crypto Embrace Will be Evident In His Appointments

Since the president-elect, Joe Biden was declared the winner of the 2020 US presidential election, the crypto sphere had been speculating on what the future holds for Bitcoin and the entire horde of digital currencies.

The president-elect has made the very first step in revealing his plans for the crypto space with the report that he is considering Gary Gensler, the former Commodity Futures Trading Commission chairman, to become Deputy Treasury Secretary.

The current Chairman of the Securities and Exchange Commission Jay Clayton has announced he will be ending his tenure with the commission by the end of the year, and thus there will be a need to fill in the gap. The chosen candidate for the SEC job as well as other key regulatory agencies will go a long way in determining what the future holds for the cryptocurrency ecosystem.

Circle CEO Tells US Treasury Department to Provide a "Meaningful Safe Harbor" for the Crypto Industry

Jeremy Allaire, the Chief Executive Officer (CEO) of Circle, a US-based peer-to-peer payments company, has sent a letter to the United States Treasury Department calling for an improved regulation that can offer a “meaningful safe harbor” for players within the cryptocurrency ecosystem.

Allaire’s letter was inspired by the recent news that the outgoing Donald Trump’s administration through the Treasury Department is planning to enact a regulatory ban over self-hosted crypto wallets.

In his letter, Jeremy recanted his experience at the beginning of the internet boom decades ago noting that he correctly predicted that the then-emerging technology will take over open communications networks despite the imminent fears of risks that prevailed at the time. Jeremy noted that the events of 1996 are seemingly playing out with open-source blockchain networks of today, a move the government is planning to clamp down on.

He also noted that the innovations of public blockchains are currently been used around the world to service clients across various industries and that any attempt to bring in strict regulations will give China an upper hand in the race for supremacy in the Blockchain and cryptocurrency ecosystems.

Allaire noted that the industry is working assiduously to prevent the technology from been harnessed by bad actors, which is one of the basic and biggest fears of the Treasury Department. Per the Circle CEO’s words:

“We have focused much of our effort on the safe and secure delivery of our technology to our growing list of clients across multiple industries. The promise of public blockchains is based in part on the security of our technology. Our industry is intensely focused on addressing concerns about the potential for financial crimes that exist with blockchain transactions and I am equally sensitive to the Treasury’s focus on the same.”

The CEO then suggested that the Treasury Department should give the industry players about a year or two to implement technologies that can help in ensuring compliance with Know Your Customer (KYC) policies and other transaction-reporting requirements, a move that will not hinder the innovations currently available in the blockchain ecosystem.

Jeremy Allaire’s proposal echoes some US lawmakers who have also expressed concerns over the proposed legislation as reported by Blockchain.news.

Image source: Blockchain.news

Circle CEO: Treasury’s Crypto Wallet Rule is a Potential Next Level of Financial Surveillance Never Seen Before

The US Treasury Department recently proposed a new regulation, which requires banks and money service businesses such as crypto trading platforms to verify the identities of self-hosted or unhosted wallet holders for any digital asset transaction that exceed $3,000.

In an effort to address anonymous transfers of digital assets by “bad actors,” the US Treasury Department has launched a proposal to require some crypto users to offer information about their identities. The new plan targets private accounts that allow the holder of a unique digital key to store crypto assets and transact with others directly without going through a financial institution.

Any cryptocurrency transaction that exceeds $10,000 would need to be reported to the Financial Crime Enforcement Network (FinCEN) within 15 days, according to the proposed regulation.

Jeremy Allaire expressed concerns ahead of the proposal

Jeremy Allaire, the CEO of payments company Circle has previously sent a letter to the Treasury Department, calling for an improved regulation that could offer a “meaningful safe harbor” for players within the cryptocurrency ecosystem. Allaire was inspired by word getting out of the enactment of a regulatory ban over self-hosted crypto wallets prior to the proposal.

Allaire has had the opinion that the cryptocurrency industry has been working very hard to prevent the technology from being harnessed by bad actors, which is one of the biggest fears of the Treasury Department. Allaire further advocated that the Treasury Department should give industry players about a year or two to implement technologies that can ensure proper KYC policies and other transaction reporting requirements, to not hinder innovations in the blockchain industry.

Jeremy Allaire: Rule on unhosted wallets is a personal mission for Secretary Mnuchin

According to Allaire, the proposed regulation by the Treasury Department on unhosted wallets was a personal mission for Secretary Mnuchin. The Circle CEO explained that Mnuchin’s personal view is far more aggressive than the proposed rule that was put forward. Allaire further explained:

“His original plan was to just drop this as a final rule with zero notice for public comment, as a “midnight rulemaking” on his way out of office. This actually didn’t have broad support, in fact very few people were even aware of this plan. As people got word, an intense amount of work went on behind the scenes to try to at least get this for a standard notice and public review.”

Mnuchin’s excuse for not wanting a public review was due to the fact that he believed this would allow the “bad guys” to move their funds off of regulated exchanges, however, as Allaire pointed out, the reason could be the fact that Jan. 20 is the end of his term.

15 days given to stakeholders is not enough

The Treasury has given stakeholders 15 days to respond with comments for the proposed rules. Allaire commented on the short period:

“The biggest issue here is first and foremost that 15 days over the holidays is totally inadequate and is just frankly a cynical ploy to jam this through no matter what feedback comes back. This violates the APA, so if it’s jammed through, expect a lawsuit for an injunction.”

New rule proposes a new level of financial surveillance

According to Allaire, the proposed rule introduces the “potential for a level of financial surveillance that goes beyond anything that exists with the existing banking system.” Allaire argued that while a large cash transaction can involve a CTR filing, however, regulators cannot track where the cash goes.

The Circle CEO advocated again for more time to work as an industry with the regulators, to prevent the hindering of creating new breakthrough innovations. He concluded:

“Key thing now is to apply as much pressure as possible, and litigate if necessary, to ensure the kind of public review, comment and iteration that this critical new economic infrastructure and innovation deserves.”

Circle Crypto Firm to Go Public in SPAC Deal Valuing At $4.5 Billion

Circle, a payment company and stablecoin issuer, has announced plans to go public later this year via a merger with Concord Acquisition Corp, a publicly traded special purpose acquisition corporation (SPAC).

The crypto financial services company expects to close the deal in Q4 and value the firm at $4.5 billion.

Circle is best known for co-creating USD Coin (USDC), the US-backed stablecoin. Circle CEO Jeremy Allaire said:

“We just see an incredible opportunity to grow rapidly and grow around the world, and we think that this set of transactions and becoming a public company sets us up to be a trusted platform in this digital currency industry,”

The firm plans to merge with Concord Acquisition Corporation, which former Barclays boss Bob Diamond backs, and the combined entity will be acquired by a new Irish holding firm that will trade on the New York Stock Exchange.

SPACs (special purpose acquisition companies) mean shell companies that raise capital through initial public offerings (IPO) to take private companies public via mergers later.

Circle, a Boston-based startup, said that the deal is expected to fetch $691 million in profits for the combined entity.

Institutional investors such as Daniel Loebb’s Third Point, Fidelity Management & Research Co, Marshall Wace, and accounts advised by ARK Investment Management LLC have come into agreement to offer $415 million in private investment in public equity (PIPE) financing. Last month, Circle raised $440 million in one of the largest funding rounds in cryptocurrency history. These show that Circle will have sufficient funds at its disposal if the merger deal goes through.

Circle’s effort to go public is set to put USDC’s Centre Consortium members on the public markets. USDC stablecoin, which Coinbase jointly administers, has increased its popularity in the stablecoin industry with a circulating supply of almost $26 billion.

Regulators’ Concerns Over Stablecoins

The announcement by Circle comes at a time amid rising concerns by regulators who worry that such digital money pegged to fiat currencies could be used to dupe consumers or enable money laundering.

In April, a federal court in Massachusetts allowed the Internal Revenue Service to seek information from Circle about US taxpayers who carried out transactions of at least $20,000 in crypto assets from 2016 to 2020. However, Circle has not been accused of wrongdoing.

In January, officials in the Biden administration warned stablecoin issuers that several consumers are unaware that the dollar-backed tokens are not federally insured and could lead to losses in their investments.

Regulators also are concerned that stablecoins could be used to sidestep the formal banking system and enable criminals to execute money laundering activities.

In May, Fed Governor Lael Brainard raised concerns over stablecoins by saying such coins introduce the risk that the private issuers default, which could harm consumers and destabilise the financial system.

Mastercard Enhances Crypto Wallet and Exchange Business

Payment giant Mastercard announced Tuesday to enhance its function and experience for cryptocurrency wallets and exchanges to their clients. The card issuer cooperates with multiple crypto enterprises to make conversion of crypto and traditional fiat money easier.

In a statement, Mastercard reveals its ambition of enhancement to the existing crypto card program with multiple partners. The card issuer considers Evolve Bank & Trust and Metropolitan Commercial Bank to issue cards, Uphold and BitPay to provide real-time crypto wallet technology, i2c Inc., Apto Payments and Galileo Financial Technologies to support processing and program management.

Meanwhile, Paxos and Circle will use their platforms to convert crypto to fiat through fiat-backed stablecoins, a class of cryptocurrency that offers price stability and is backed by reserve assets.

Raj Dhamodharan, executive vice president of digital asset and blockchain products & partnerships at Mastercard, welcomed the partnership and said:

“Not all crypto companies have the foundational infrastructure to convert cryptocurrency to traditional fiat currency and we’re making it easier…Mastercard expects to deliver on our the promise of consumer choice to provide options to people around the world on how and when to pay,”

This is “a critical step in expanding the ecosystem and safely, securely and compliantly setting the stage for the future of crypto payments,” the statement added.

Mastercard understands the growing demand for digital payment from its customers. More than 93% of clients considered adopting innovative payment methods, such as biometrics, digital currencies, and QR codes. Therefore, the payment platform has announced in February to support direct crypto payments by allowing cardholders to transact crypto on its network this year directly.

Meanwhile, Visa, one of the major competitors to Mastercard, their visa cardholders has spent more than $1 billion worth of crypto in the first six months this year by consumers globally. Recently, Visa expanded its business in Australia by approving an Australian startup CryptoSpend to issue debit cards for its customers to consume through cryptocurrencies.