Bitcoin startup Circle rolls out no-fee digital currency banking

Circle, a Bitcoin currency services provider, has launched a suite of consumer financial services that the company hopes will encourage average people to use the crypto-currency for everyday transactions.

Circle was founded in 2013 by internet entrepreneurs Jeremy Allaire and Sean Neville. The company is backed by leading venture capital investors Jim Breyer, Accel Partners, General Catalyst Partners and Oak Investment Partners, who helped raise $26 million in series B financing for Circle.

The goal behind the founding of the company was to address "the terrifying complexity and risk" many people associate with crypto-currency, as stated on their website. The founders of Circle believe that Bitcoin holds great promise but lacks mainstream appeal since many are turned off by the complexity and the scandal-plagued headlines about the fledgling currency.

“You shouldn't have to pay extra to use your own money. We don't charge fees when you convert funds to or from Bitcoin, when you store your Bitcoin, or for Bitcoin transactions,” reads the Circle’s website.

How it works

Unlike the myriad of currency exchanges out there that are mainly used for trading and speculation, Circle’s platform is instead focused on promoting Bitcoin as a secure store of value and what Bitcoin is actually intended for – everyday transactions i.e. depositing, withdrawing and converting Bitcoin, for which users can set up a free account.  

Circle CEO, Jeremy Allaire, explains:

"Our goal is to make it easy for consumers to deposit and convert currency into a digital form that they can then use globally and instantly, not offer a trading exchange where they can bet on a speculative asset."

The way it works is customers must first set up an account where they can deposit fiat currency that will be converted in Bitcoin. These funds are then stored free of charge and can be sent and received anywhere in the world. When a customer withdraws funds, they are converted into the local currency and transferred to a bank.

Security concerns addressed

Many would agree that security issues, theft, and risk of fraud are probably the biggest hurdle to Bitcoin’s acceptance by the mainstream. To tackle this issue, Circle has implemented several features that will eliminate the chance of theft and fraud.

Circle claims that their network architecture was pressure tested by a national cybersecurity firm along with black and white hat hackers who test system vulnerability. Among the platform’s defenses will be “military-grade” encryption keys and offline “cold storage” vaults that are inaccessible to cybercriminals, according to the company.

"We maintain several geographically distributed secure vault facilities protected by multiple layers of access control, monitoring and armed guards," Allaire wrote in a blogpost.

Additionally, the company also asserts that all deposits to the platform are fully insured as it is a regulated money transmitter in the US and complies with Federal law regarding KYC (Know Your Customer) and AML (Anti-Money Laundering) considerations. This implies that if a Mt. Gox-type event happens to occur, customer deposits will be protected.

Right now, the sign-up process is done by invite only meaning you will have to wait until you receive one. In the meantime, Circle has posted a promotion, offering $10 worth of Bitcoins to every new customer for free.

About Circle

Circle is a consumer finance company focused on transforming the world economy with secure, simple, and less costly technology for storing and using money. Visit their website.