Goldman Sachs, the international investment bank and financial services company, announced yesterday that they are releasing Circle USD Coin, a new cryptocurrency. The cryptocurrency is launched by Circle, a payment startup owned by Goldman Sachs.
As a digital version of the US Dollar, the USD Coin will have major implications on trading. Circle USD Coin is also the very first cryptocurrency owned by a well-known financial institution. Many people wonder how the Circle USD fits in with a network that is supposed to be decentralized and out of government control. However, Goldman Sachs state that they intend to bring some stability to the volatile cryptocurrency market through this launch; the peak and fall of the market is exhausting to keep up with.
To add further fuel to the controversy, Circle announces that the value of the USD Coin will be directly tied up to the US Dollar in order to keep it away from instability and regulation issues. Would Circle still be able to provide a transparent network, which is the prime feature of cryptocurrencies? Goldman Sachs does not have an answer to that question yet.
Sam Altman, Silicon Valley investor, firmly believes that any USD based cryptocurrency must still remain under distributed control.
The Circle USD Coin cannot be mined like other cryptocurrencies, which can be obtained by using supercomputing hardware and software. The USD Coin plans to operate on the Ethereum platform and traders can purchase them on the same.
The Circle USD seems more like a normal online credit than a real cryptocurrency. The Coin can only be purchased if you have one dollar in fiat money and users can own it from an open-source account.
Goldman Sachs’ main aim in the cryptocurrency community is to help in the trade of Bitcoin on behalf of investors. The financial institution is more into stabilizing the crypto-community than beating the centralized system today. The purpose of USD Coin is to provide a practical cryptocurrency for everyday use and allow the crypto-world to interact with the fiat currency world. In the future, the Circle USD Coin may play a bigger role in the crypto-market than it does now.