The partnership between Barclays and social payments app Circle, which is partly run on Bitcoin, is the first time a major UK bank has got involved in the digital currency.
The UK Treasury called the deal a “major milestone” in its quest to turn the country into a capital of FinTech innovation. Barclays becomes the first major UK bank to enter into a partnership with a digital currency firm that uses Bitcoin, according to Reuters.
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Circle comes to the UK after partnership with Barclays
The Circle app launched in the UK on Wednesday after being granted an e-money license by UK watchdog the Financial Conduct Authority. The decision marks another first for a digital currency company.
Circle is a Boston-based startup backed by $76 million in venture capital, with Goldman Sachs and Digital Currency Group among its investors. The license will enable the app to store money and make domestic and international payments, some of which use Bitcoin.
The payment company lets users send text messages, emojis and GIFs along with payments.
“The founding vision for Sean and I was that money should work the way the internet works,” said Circle CEO Jeremy Allaire, who founded the company along with Sean Neville. “This is the thing that I think we’re all learning from the Chinese: that this merging of messaging, media and payments together really makes sense to people.”
Is the UK becoming a FinTech hub?
Circle launched in the U.S. in late 2015 and is now offering transfers of pounds and dollars. It claims its rates are better than other money transfer services and there are no added fees. Euros will also be added to the service later in the year following a European launch.
Bitcoin is used to transfer money to those countries where Circle hasn’t launched yet. The money is converted into Bitcoin before sending, the transfer is settled via the blockchain network, and the money is converted into local currency on arrival.
Barclays Corporate Banking will provide the account needed for Circle to store sterling, along with payment infrastructure. “We support the exploration of positive uses of blockchain that can benefit consumers and society,” said a Barclays spokesperson in a statement.
Banks have tended to steer clear of firms involved in Bitcoin due to the digital currency’s association with the dark web and illegal activity. Barclays support for Circle is a huge coup for the payments app.
“Circle’s decision to launch in the UK, and the firm’s new partnership with Barclays are major milestones,” said Britain’s Economic Secretary to the Treasury Harriet Baldwin. “They prove our decision to introduce the most progressive, forward-looking regulatory regime is paying off and cements our status as the world’s Fin Tech capital.”