Circle receives first e-money license from UK government

Virtual currency company Circle has been awarded the first e-money license by the UK government, demonstrating the government's desire for London to become a hub for the development of financial technology.

The Financial Conduct Authority, Britain's top financial regulator, has issued an e-money license to Circle, a Boston-based company that uses the virtual currency bitcoin to enable consumers to pay other consumers through mobile apps.

The regulator granted the license to the company by placing it in the government’s Innovation Hub, one of several initiatives by the U.K. government to encourage experimentation in the financial industry.

The license will allow Circle to enter into a banking partnership with Barclays Bank in the UK. While Circle has attracted a lot of investment, this is the first time a major bank has been willing to work with a bitcoin company.

Circle was founded in 2013. In the United States, Circle already allows consumers to quickly transfer payments and buy and sell Bitcoin, and now consumers in the UK can also enjoy these services.

But Circle's long-term goal is to use bitcoin as a backend network to make it easier and cheaper to transfer money between national currencies. Bitcoin technology, which first emerged in 2009, has been promoted as a fast and cheap way to transfer money across borders without having to use traditional money transfer services such as Western Union.

Circle allows users to control their funds in the form of national currencies, thus avoiding the possible losses caused by Bitcoin's price fluctuations. When customers want to transfer funds, they can buy short-term Bitcoins to transfer funds (US dollars or British pounds) to the relevant bank account.

The UK license allows Circle customers to instantly transfer money between the US dollar and the British pound, and given that the e-money license is valid across the European Union, the euro will soon be added.

Jeremy Allaire, co-founder of Circle:

“This will be the first time that consumers in the UK and US will be able to send pounds and dollars back and forth instantly and for free.”

Jeremy Allaire

Bitcoin is having a tough time. Developers who maintain the basic Bitcoin software have been at odds over software updates. This has led to a split in the Bitcoin community and a slowdown in transactions.

Some companies have begun turning to other virtual currencies as an alternative to Bitcoin, such as Ethereum, which can transfer funds using the blockchain. Jeremy Allaire said Ethereum is not yet suitable for international use like Bitcoin, but it may be in the future.

He said:

“We are not wedded to one blockchain.”

In the United States, Circle has not taken Bitcoin mainstream, but it has obtained some key official licenses for Bitcoin. In 2013, Circle received investments from Accel Partners and General Catalyst Partners. In 2015, Circle became the first company to obtain a BitLicense from the New York State Department of Financial Services.
The UK government has taken several steps to highlight its interest in attracting cryptocurrency startups to London.

In 2014, British Chancellor of the Exchequer, George Osborne, publicly stated at an event that the government hoped to cooperate with virtual currency companies, and at that event he publicly used a Bitcoin ATM to purchase virtual currency.

George Osborne, Chancellor of the Exchequer

His move, at least to some extent, attracted new businesses to London.

Several senior executives at Barclays, a British bank that operates a lab in London dedicated to experimental blockchain technology, have previously discussed the bank’s interest in bitcoin and blockchain.

Original: http://www.nytimes.com/
By Nathaniel Popper
Compiled by: Kyle
Source (translation): Babbitt Information (http://www.8btc.com/circle-gets-an-electronic-money-license)