Chinese search engine Baidu has entered the financial revolution that is FinTech for the first time with an investment in an American Blockchain company.
Circle Internet Financial Inc. was founded in 2013 by Jeremy Allaire and Sean Neville in Boston, Massachusetts and has an international operations headquarters in Dublin, Ireland.
The Bitcoin startup announced it had raised $60 million in funding from a consortium which was led by IDG, an American based media, data and marketing services and venture capital organization.
Participants included Baidu, Breyer Capital, General Catalyst Partners, CICC Alpha, China Everbright Investment and Assets Management, IBM's former chairman and CEO Sam Palmisano, and Silver Lake's co-founder Glenn Hutchins.
Peter Fang, executive director of Baidu corporate development, says:
“Circle is one of the most impressive startups in the blockchain technology space. Together with other influential investors, Baidu is very excited to partner with Circle team to build its vision successfully and globally.”
Global payments network
Circle's news of entering the Chinese P2P payment market with Bitcoin and allowing users to realize the potential of rapid transfers with their friends was simultaneously announced with the partnership of Goldman Sachs and Barclays, which was the first time a European bank has allowed a digital currency company to use its infrastructure enabling it to transfer sterling, euro and dollars.
The company co-founders Sean Neville and Jeremy Allaire noted that the company is building a global payments network that will soon enable users in the U.S., Europe and China to exchange value seamlessly and nearly instantly.
This enables users of their payment app to exchange sterling, renminbi, euro and dollars instantly and free by converting the fiat to Bitcoin and moving them across the Blockchain where transactions are verified and recorded.
Neville and Allaire say:
“We want to connect consumers using dollars, pounds, euro and renminbi the same way that the web, email and other protocols have connected consumers globally.”
Connecting China to the US and Europe
Now that Circle China has established its Chinese branch, they are aiming to capitalize on a population that is already comfortable with payments made over social media even though Bitcoin payments in China are currently not officially recognized by the Chinese government as a legal means of funds transfer yet.
China already has a mobile payment and money management market dominated by local players Alipay and Tencent and Allaire says Circle won't try and compete with the dominant brands.
Allaire explains:
"We actually have zero illusions that we can compete with those companies (Alipay and Tencent) in the domestic Chinese market. That is just not feasible. But what we can bring to the table for Chinese consumers connectivity to the US and Europe, and provide a seamless experience for sharing value.”
According to Allaire, the focus around Circle China is cross-border payments.
He notes:
“If I'm a parent in China and my son is studying at London Business School, I might want to send 500 RMB. I should be able to do that and have my child instantly receive it as pounds sterling, in the same way people do that with instant messages today. We are leveraging the fact that we are licensed across the different zones to connect to those use cases."