In the not-too-distant future, VC-backed startup Circle plans to create a kind of Crypto pub.

This information comes after Circle’s acquisition of Poloniex, which acquired Poloniex exchange, was announced on February 26. Notably this is one of the largest acquisitions in the industry to date.

Circle President Sean Neville told CoinDesk:

“Instead of seeing a single Star Wars-type Token that is good for all things across the galaxy, we will see an increase in Tokens with different functions.”

Ultimately, Neville believes that the new service, officially called Circle Poloniex now, will offer a whole new type of exchange, which will give users access to the full spectrum of Cryptocurrency and Crypto Tokens.

According to Circle executives, the acquisition is a win for both companies.

Circle customers will again have the ability to buy and sell Bitcoin (a service the company shut down in December 2016) and many other cryptocurrencies. And Poloniex customers will have access to Circle’s licensed and well-functioning business equipment, developed over the past five years with $140 million in venture capital.

The benefits of Poloniex are likely to be huge as the market’s rhythmic business has slowed over the past few months as complaints about its service have been raised.

While some reports put a buyback price of $400 million, Circle managers did not confirm that number to CoinDesk, explaining that the contract began last spring.

According to Circle founder and CEO Jeremy Allaire, the startup currently employs more than 200 people and plans to hire 100 more to fulfill its vision of currency pluralism.

Allaire said:

“It’s a watershed moment where we’re really marking the beginning of the major consumer products that can be built on top of these markets and this infrastructure.”

What is Circle X?

At the heart of this transformation is what Circle refers to as “Circle X” – the notion that in the future, exchanges will not be divided into multiple categories.

Instead, Neville predicts, the exchange will be less specialized than it currently is and will host an array of tokens representing everything from traditional stocks to new assets (like what cryptocurrencies are doing now). ).

“We see the future of Poloniex as a full-fledged marketplace where tokens can represent all types of assets and all types of contract agreements,” Neville said. “We will see things that are really meaningful to solve or have utility value that can be less volatile from a market perspective and we will see some tokens that are really equity and that very nice”.

Instead of cryptocurrency exchanges being different from stock exchanges and different from currency markets, Circle believes that all of those transactions will happen in one place – in a seamless backend that connects the world. digital world with the real world.

Allaire told CoinDesk:

“From our perspective, pulling it all together, pushing them all together, allows us to realize broader ideas about consumer products.”

As such, this new type of exchange not only allows traditional Cryptocurrency exchanges like Coinbase to forge new ways, but it can also compete with other exchange systems (ATS) like tZero and Templum, which system that focuses on listing Crypto Tokens that are regulated as securities.

As part of this “evolution,” as Neville called it, he envisioned incorporating banknotes into Poloniex’s current product.

Although Poloniex allows trading with around 100 different cryptocurrencies and Crypto Tokens, trading users have had to transfer those funds to platforms like Circle in order to convert to paper currency. However, Circle will be able to leverage its existing regulatory compliance work to accelerate the addition of certain fiat currencies to the trading service.

“We have the licenses and relationships to do it all in USD, but also in Euros and Pounds. [Anh]”, he said.

While there are currently no plans to delist any of Poloniex’s existing tokens, Neville says Circle is building a “regulatory framework” that will accelerate the rate at which tokens can be added to that platform. .

Solving problems

Circle not only wants to add to Poloniex’s service, but also wants to solve some of the problems the exchange also faces.

Complaints have been made about delayed transactions and ignoring requests on public channels for some time. In an effort to address this, Neville said Circle will offer some of its customization tools.

For example, an internally developed tool called “Diameter” is flagged as Poloniex’s means of solving problems in order to handle the number of customer service requests it receives.

Diameter connects directly to a platform’s backend processes and acts as a filter before a human customer service agent joins. By automating solutions based on specific problems, staff can tackle a lot of traffic through the use of the tool.

Currently, Diameter is used by Circle’s global support team in Europe and the US.

“It’s a natural match for Poloniex’s needs, especially in the short term,” Neville said.

In the long run, however, perhaps a more important benefit of this acquisition concerns financial regulations. In the press release announcing the acquisition, Circle said legalization is one of the key areas where it could help Poloniex.
However, in the interview, Neville downplayed the issue a bit, saying that Poloniex has “done a good job of legitimizing the laws they’re required to comply with in order to support their customers.”

However, New York Times reporter Nathaniel Popper tweeted a link to an image showing that the SEC has agreed to refuse to pursue enforcement action against Poloniex if Circle registers the exchange as a system. alternative transaction.

While Allaire did not confirm whether the information was accurate, when asked about the tweet, he said:

“We believe the technology of companies like Circle complements this mission and look forward to working closely with all regulatory stakeholders, both domestic and foreign.”

According to Tapchibitcoin /Coindesk

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