Circle bids to take bitcoin mainstream

Circle bids to take bitcoin mainstream

Circle Internet Financial has unveiled a free platform for buying, storing and paying with bitcoin, promising to bring the crypto-currency to the masses.

Despite entering the public consciousness over the last year, bitcoin has a dubious reputation, considered confusing and complicated by many and associated with volatility, crime and regulatory uncertainty.

With $26 million in funding behind it, Circle and its founder, serial entrepreneur Jeremy Allaire, are bidding to drag the currency to respectability and widespread adoption.

In a blog post, Allaire says: "To the average consumer, early bitcoin products and services were complex, full of friction, unfamiliar, and some were also of questionable reputation in terms of the safety and security of money."

To address this, the new Circle platform - still in invitation-only mode - lets users deposit fiat currency into their account, which is then converted into bitcoin. When the user withdraws funds, they are instantly converted back and transferred to a bank account.

The service is free and Circle says that users can set up an account, make a deposit and access and use bitcoin within minutes. In a bid to attract users from outside the core bitcoin-demographic, the site even offers old-fashioned phone support so that customers can talk to a real person if something goes wrong.

With theft a major concern in the wake of the Mt. Gox hack, Circle also boasts comprehensive security with multi-signature architecture, offline cold storage vaults, two-factor authentication, and free insurance. The firm has also become a regulated money transmitter in the US, requiring it to maintain 100% of customer deposit value.

Separately, another bitcoin heavy-hitter, BitPay, has struck a deal to integrate the currency into point-of-sale software from Toshiba. The Toshiba VisualTouch software - used by more than 6000 firms - will use BitPay's POS-integration technology to grow bitcoin acceptance through brick-and-mortar retail locations.

Tony Gallippi, executive chairman, BitPay, says: "The ability for customers to use bitcoin at businesses with VisualTouch POS systems provides merchants an extremely loyal customer base who will go out of their way to support companies that accept bitcoin."

Comments: (3)

A Finextra member
A Finextra member 16 May, 2014, 12:06Be the first to give this comment the thumbs up 0 likes

This is a great move forward. I think that the phone support for the Bitcoin and account security measures should bring this start-up idea far ahead. But to do so, they need to fix the flaw and reputation isses around the currency.

A Finextra member
A Finextra member 16 May, 2014, 14:08Be the first to give this comment the thumbs up 0 likes

Circle sounds very promising. I am not an expert on Bitcoin. However, even if circle is fantastic and they deliver everything that they promised to deliver, how does that stop the rising and falling of the value of Bitcoin? Is this what is the 'flaw' that Otmane is talking about? Can anybody assist me with these questions? Thank you.

Russell Bell
Russell Bell - Fastbase Ltd - Wellington 19 May, 2014, 04:57Be the first to give this comment the thumbs up 0 likes

Bitcoin is traded on a number of exchanges around the world.  More exchanges means a more stable exchange rate, thanks to arbitrage.  If Circles' platform becomes a successful exchange, that contributes to reducing volatility.

The other important concerns that any exchange (or deposit-taker) needs to address are integrity and regulatory uncertainty.  Can you trust them with your money, and will they be allowed to operate unhindered ?  Ease of use is also a concern for both consumers and for merchants.

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