Circle, the Bitcoin wallet start-up, has been granted an electronic money license allowing it to store British pound sterling by the Financial Conduct Authority, Britain’s top financial regulator. This means that British people will be able to use the Circle app to transfer funds to one another, or as Circle puts it, make “social payments.” The license, which is technically valid across the Euro-zone, has also enabled Circle to establish a business relationship with Barclays bank. Circle has attracted plenty of attention and investments from other financial institutions, but this is the first time a global bank has agreed to work with a Bitcoin company. Circle has a similar license to transfer money within the United States.
Circle is an app that allows friends or family members to send cash to one another without all of the archaic and frustrating obstacles of traditional finance. Circle prides itself on using open internet standards and procedures to offer this service for free while maintaining a risk adverse stance and technologies like its innovative AI risk engine which works to keep the money of its users safe. Now that Circle is able to operate in the UK, users will be able to transfer funds between dollars and pounds.
While it’s exciting that the British market has access to this service, Circle’s new relationship with Barclays and the door that has been opened to the European market are the real exciting news. Sean Neville and Jeremy Allaire, the co-founders of Circle, recently wrote in their blog, “We are gearing up to bring the same capability to Euro-zone customers”. It’s entry to the British market is considered a stepping stone to the Euro-zone, potentially within the next year. This will open up the transfer of funds between the United States, the United Kingdom, Europe, without fees or red tape.
Circle works by allowing its users to store money in US dollars or British sterling, only converting small amounts to Bitcoin when transfers are needed. This means that users are able to take advantage of the fluidity of Bitcoin and while avoiding its often volatile value fluctuations.
While Bitcoin is still not considered a mainstream currency, businesses like Circle are making great strides in legitimizing the currency. For example, Accel Partners and General Catalyst partners are two venture capital companies which provided funding to Circle. Circle has also successfully attained a BitLicense from New York State’s Department of Financial Services.
Licensing and partnerships with international financial institutions such as Barclays enable Circle to work in partnership with regulators like the DFS to confront the fraud and crime that has plagued virtual currency companies. The investment of the British government provides not only further legitimacy to Circle and Bitcoin but also demonstrates the British government’s dedication to supporting the Fintech industry. Traditional finance is expected to be slow, hyper-regulated, and burdensome for users. The British government shows that it is supportive of advances in financial technology and that it wants to work in partnership with innovative firms to ensure that developments in the industry are safe, user-friendly, and scalable for domestic and international use.*
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