Circle Internet's international money transfer service, built on a type of blockchain called Ethereum, will allow customers to send payments between U.S. dollars, British pound sterling or euros on their mobile phones. There are no fees or foreign exchange mark-ups.
International payments, according to Circle's chief executive officer and founder, Jeremy Allaire, should not take days to be processed and should be as easy and frictionless as sending an email.
"When's the last time you sent a 'cross-border email'?" Allaire said in an interview. "The idea of cross-border payments is going to completely go away. ... Our vision is for there to be no distinction between international and domestic payments."
Circle, which processed over $1 billion in transactions in 2016 and whose customer base increased more than 10-fold in the year up to last month, does not make money from its payments service, nor does it plan to, as it reckons consumers expect these services to be free.
"We don't think there is any money to be made in payments anymore," said Allaire. "The entire business model of extracting a toll or having time delays around the movement of value is going away completely."
Instead, the company makes money by trading bitcoin and other cryptocurrencies, both on digital currency exchanges and over the counter, at a time when the value of such web-based currencies has reached record highs. Last month alone, Circle traded over $800 million in digital assets, it said in a statement.
Blockchain technology is increasingly being viewed as a way of transferring data from one location to another in a secure manner that is immune from the types of threats that have assailed the SWIFT network; most spectacularly with the Bangladesh heist. However, speculating on the value of crypto currencies as a business model would appear to be fraught with dangers.
Bitcoin offers an example of a price chart which lost consistency at its penultimate high in May. It then rallied to a fresh high on Monday before posting a large downside key day reversal. It has now fallen almost $1000. On previous occasions when large downward dynamics have checked bitcoin’s advance they have resulted in multi-month ranges. That is a highly likely outcome following the recent run up and subsequent sharp pullback.