Goldman Sachs has just announced that it will be launching a new cryptocurrency called Circle USD Coin. In fact, Circle is a startup invested in by Goldman Sachs. The idea behind the new digital asset is to revolutionise how people transact on a daily basis. For example, while bitcoin was thought to be of transactional value, it did not turn out this way, considering the high fees and long processing time.
Now, Goldman Sachs and Circle are coming full force with the new digital currency, Circle USD Coin. The name of the cryptocurrency is very interesting, indeed, as it points out the major unique feature of the coin – it’s the digital version of the regular US dollar.
Goldman Sachs is actually making history with the release of the digital currency, as no other financial institution has issued one, so far. Or at least, no other major investment bank. The special feature of Circle USD Coin issued by Circle is that it is actually backed up be real fiat US dollars. By creating a digital version of the US dollar, Goldman Sachs and the startup are hoping to “prove detailed financial and operational transparency, operating within the regulated framework of US money transmission laws, and reinforced by established banking partners and auditors”, as described by Circle’s website.
While Goldman Sachs is heavily “invested” in cryptocurrencies and have made news that they will trade bitcoin for their clients, the idea that one digital coin will be interchangeable and purchased with one regular US dollar feels counterintuitive, as digital currencies were created to establish financial independence, transparency and deregulation of the whole market.
With the heat coming from institutions on regulating the cryptocurrency market, Goldman Sachs and Circle have probably thought of the best way to be “in the game” while staying somehow true to the traditional way of thinking and transacting with money.