Cryptocurrency, even the big names like Bitcoin and Ethereum, have not been widely adopted, especially out in the real world. There are relatively few places where you can use them to pay for coffee, gas, bills, etc. And this limits their functionality as a currency. But Goldman Sachs plans to change this with their new digital currency: Circle USD Coin.
While the traditional finance world has long steered themselves away from digital currency, it was really just a matter of time before one of them decided to embrace it fully. The cryptocurrency community has been waiting for this moment—some with great hope, but probably more with great apprehension given this move is in direct opposition to the decentralization that attracts most enthusiasts.
Goldman Sachs is a household name and one that most people trust. This means that it has the power to convert crypto-skeptics in record numbers, and that is precisely what the company is looking to do. Circle USD Coin is designed to be both easy to use and easy to understand; in essence, it will be the digital version of the US dollar, making people feel as though they are dealing with something more concrete than other cryptocurrencies.
While it is hardly a guarantee, there is also speculation that this move will bring greater stability to the notoriously volatile market since its value will be tied directly to that of the US dollar.
To those not in the cryptocurrency industry, this might sound like a good thing, but for those who deal in crypto, it doesn’t make much sense. Part of the appeal of cryptocurrencies is that their value can exceed that of fiat currencies; the Circle USD Coin will always have the same value as the dollar.
Another difference is how you obtain the coins. No mining is involved; the coin is simply purchased—one dollar for one dollarcoin.
Knowing all of this, some may be wondering what the point in creating this currency is. It would seem that the idea is to create an open-source manner of digital payment that allows people to skip using the debit or credit cards—one that the average American can easily understand and use.
While it may not offer the same gains as Bitcoin and other cryptocurrencies, there is a chance that its accessibility and easy-to-understand design may see it become the most used form of cryptocurrency in the United States. And really, that is what Goldman Sachs is counting on.