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Circle CEO Accepts Justin Sun’s Invitation to Warren Buffett Lunch

Circle CEO Jeremy Allaire will be one of seven people Tron’s Justin Sun will take to the power lunch with Warren Buffett.

Circle CEO Jeremy Allaire will attend the crypto power lunch alongside Berkshire Hathaway CEO Warren Buffett, Tron CEO Justin Sun and Litecoin creator Charlie Lee.

On July 19, Allaire accepted Sun’s invitation on Twitter to join the much-anticipated $4.6 million lunch with the well-known Bitcoin (BTC) skeptic to discuss issues in crypto industry.

In just three minutes after Sun posted the invitation, Allaire tweeted that he is honored to join, adding that the meeting would be a great chance for both Buffett and crypto community representatives to learn from each other.

First announced in early June, after the Tron CEO won an eBay charity auction, the lunch is expected to be held on July 25 at Quince, a three-Michelin starred restaurant in San Francisco.

Allaire will be one of seven friends that can accompany Sun in his lunch with Buffett. As such, Sun noted that he will be announcing the rest of his entourage within the next 7 days.

In mid-June, Litecoin (LTC) creator Charlie Lee became the first guest to join Sun’s lunch with Buffett.

Allaire, co-founder and CEO of Goldman Sachs-backed payments company Circle, has recently expressed hope that Facebook’s crypto project Libra will trigger the development of the national approach to policies regarding digital assets. Previously, Allaire urged that crypto space needs regulatory certainty, adding that the existing definition of cryptocurrency is too broad.

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Circle CEO Hopes Libra’s Unique Needs Trigger Positive Regulation

Jeremy Allaire, CEO of payments company Circle, said that Facebook’s Libra will run in a closed-loop permission scheme, requiring a different regulatory approach.

Jeremy Allaire, co-founder and CEO of payments company Circle, said that Facebook’s Libra will run in a closed-loop permission scheme that has its own requirements for regulation during an interview with Bloomberg released on July 5.

During the interview, Allaire pointed out that there are different stablecoin implementations distinct in their regulatory approach. He explained:

“There’s a really key difference between stablecoins that run on kind of closed-loop permission schemes — which is how Libra is being proposed today, at least in its initial incarnation — versus stablecoins that can run on the public internet.”

Allaire also specified that the latter is the approach of USDCoin (USDC), the stablecoin jointly released by Circle and U.S. cryptocurrency exchange Coinbase. He also noted that he hopes Libra will trigger the development of national policies concerning digital assets. He said:

“Our view is that, you know, crypto and blockchains represent sort of the fabric of the 21st-century economy, and there’s an opportunity to put in place policy that allows us to flourish on a massive scale in the same way that the internet flourished in the mid- to late-nineties and policy was really vital to enabling that.”

As Cointelegraph reported in May, Allaire already pointed out that the cryptocurrency space needs regulatory certainty and the current definition of cryptocurrency is too broad.

Allaire also said during the interview that he expects that mass adoption of non-sovereign store of value digital assets like bitcoin (BTC), but that he also foresees growth to happen in the adoption of stablecoins.

Allaire also recently debated Canadian businessman and TV personality Kevin O’Leary, who said that cryptocurrencies pose serious compliance challenges to the financial services industry.

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Kevin O’Leary: Crypto ‘Crap’ Is Not Compliant, Rogue Currency

Kevin O’Leary said that cryptocurrencies are non-compliant, and as such are not useful for paying taxes or being used as a currency.

Canadian businessman and TV personality Kevin O’Leary said that cryptocurrencies pose serious compliance challenges to the financial services industry.

During an interview published on July 3, O’Leary said that he would not invest or get involved in cryptocurrencies because of their purportedly unregulated nature:

“If I want to be compliant and I don’t wanna breach any regulators because I’m a participant in financial services globally, and that is where the majority of money is, […] I have to be compliant, I have no interest in doing any of this crypto crap because it is not compliant.”

O’Leary suggested a hypothetical “regulated” crypto asset based on two or three prominent fiat currencies such as the U.S. dollar, the yen, and the euro or the Swiss franc.

With this asset, O’Leary claims it would be possible to buy equity, pay debt and taxes, and also convert back to the original fiat currency. When it comes to traditional cryptocurrencies, O’Leary said that he does not want to hold any:

“All of this non-compliant stuff… I don’t want to get involved with a drug dealer trading bitcoins somewhere. I want nothing to do with that.”

Circle co-founder and CEO Jeremy Allaire challenged O’Leary by pointing out that intermediaries between the cryptocurrency ecosystem and the banking system are regulated:

“The crypto industry has been regulated in the U.S. since 2013. If you want to sit between the banking system and cryptocurrency, you have to be licensed as a financial institution.”

O’Leary concluded that, since one cannot pay taxes with cryptocurrencies, they are currently a “rogue currency.” 

The TV host has previously expressed his pessimism toward crypto assets. In May, he said that he believes bitcoin (BTC) is a useless currency, since people accepting it want to hedge against its volatility.

Concerns about regulatory clarity and compliance are also shared by the cryptocurrency community. In the United States, regulators are working to better define digital assets so as to promote the industry’s development. In April, Representatives in the House of Representatives reintroduced the Token Taxonomy Act, which aims to provide clearer guidelines for blockchain and crypto businesses.

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Circle CEO: Non-Fiat Monies Like Bitcoin (BTC) to Continue to See Growth

Allaire On Crypto Spring

Ever since Bitcoin (BTC) and other crypto assets have begun to rebound, mainstream media has been all over the space once again, in a way somewhat reminiscent of 2017.

Yesterday, Jeremy Allaire, the chief executive of the Goldman Sachs-based Circle, joined CNBC’s “Squawk Box” panel to talk about the ongoing cryptocurrency spring, and why Bitcoin can continue to see continued growth with time.

Explaining what’s up with the recent Bitcoin rally past $11,000, Allaire asserts that investors across the board, especially institutional players, have come to a greater understanding of the space and have tried to accumulate due to growing fundamentals of cryptocurrency and blockchain.

But most importantly, he claims that investors have started to await the launch of “next generation blockchains” (Cosmos, Algorand, etc.), Libra, of course, being the latest and one of the most important.

On the matter of why he thinks the launch of these blockchains will aid Bitcoin, the chief executive noted that new platforms and digital assets will bring together the diverse ecosystem. Libra and other stablecoins, for instance, can act as a unit of account, whether that be for salary or tax purposes.

But from there, as a result of network effects, stablecoins acting as onramps, among other factors, non-sovereign monies, especially Bitcoin, will continue to become more and more important on the stage of global finance. As Allaire puts it:

“More people are going to see the value of a censorship-resistant, highly secure digital asset.”

Macroeconomic Backdrop Accentuating Need for Bitcoin & Gold

Indeed, the current macroeconomic backdrop is, in the eyes of many analysts, creating a need for Bitcoin right now. A need that may only grow rapidly with time.

  • Over the past month, Hong Kong has experienced massive protests. Hongkongers fear that an extradition bill recently proposed can be used to extract those critical of Beijing’s policies and send them to mainland Chinese courts, where they can then be tried and potentially face a harsher sentence than if they were to remain in Hong Kong. As a result, many have begun to move capital out of Hong Kong and begun to stop using fintech accessories. Bitcoin, of course, is very important in this fight for freedom. Case in point, Hong Kong crypto exchanges saw a premium last week, as LocalBitcoin’s HKD volume shot through the roof.
  • Recently, Italy’s deputy prime minister has proposed a tax on citizens’ savings. Per a report from Reuters, the regulator, Matteo Salvini, told a late-night television program that he had been informed the safety deposit boxes across the European nation hold assets worth hundreds of billions. As a result of this “substantially hidden money”, Salvini, who evidently is a powerful man in Italy, proposes a 15% tax on those that declare their deposit-box holdings. As prominent analyst Alex Krüger kindly puts it, “Italy could end up being the best thing to ever happen to bitcoin.”
  • But most importantly in this section, the Federal Reserve recently announced that it will be doubling-down on inflationary fiscal policy, with chairman Jerome Powell hinting that he will cute the Fed Funds rate. This is bullish for Bitcoin in the short term, as it incentivized investors to look to more risky assets. It also is bullish for Bitcoin in the long term, in that inflationary policies force investors to look for “harder monies”, namely something supply capped like BTC.
Photo by Chris Lawton on Unsplash

The post Circle CEO: Non-Fiat Monies Like Bitcoin (BTC) to Continue to See Growth appeared first on Ethereum World News.

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Circle Sheds 10% of Workforce as CEO Blames Restrictive US Regulatory Climate

30 employees left the company on May 21, says Jeremy Allaire, amid the turnaround in the crypto markets.

The CEO of Goldman Sachs-backed crypto finance startup Circle blamed a hostile regulatory climate in the United States as he confirmed layoffs of 30 staff on social media May 21.

Following a blog post in which he described the difficulties operating in the U.S., Jeremy Allaire said that executives had taken the decision to release roughly one in ten of Circle’s employees.

“Today we made organizational changes at Circle and eliminated approximately 30 positions, which is about 10% of our employees,” he wrote. Allaire stated:

“We made these changes in response to new market conditions, most importantly, an increasingly restrictive regulatory climate in the United States.”

As Cointelegraph reported, Allaire had taken aim at the slow progress on unifying the patchwork U.S. regulatory landscape, but remained hopeful that the future would bring improvements.

He made the comments while attempting to explain why Circle had cut off U.S. access to certain trading pairs on Poloniex, a cryptocurrency exchange the company acquired in 2018.

Announcing the firings, Allaire likewise sought to underscore Circle’s overall health as a company.

“Circle remains strong and healthy, and we will continue to drive new product innovation and growth globally, working with jurisdictions that offer forward-looking policies regulating digital asset businesses, while we press for more balanced crypto policy in the U.S.,” he added.

Crypto outlet The Block also reported that Circle has purportedly lowered its March fundraising goal of $250 million by 40%, citing unnamed sources.

Circle is just the latest industry business to slim down its operations in response to an extremely challenging year.

As Cointelegraph noted, bitcoin (BTC) mining giant Bitmain, blockchain startup ConsenSys and exchange Huobi had previously taken the decision to reduce staff numbers.

Since then, markets have rebounded, with bitcoin (BTC) staying around $8,000 at press time.

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Circle CEO Jeremy Allaire: Crypto Space Needs Regulatory Certainty

The CEO of CIrcle, Jeremy Allaire, has said that the crypto space needs regulatory certainty and the current definition of crypto is too broad.

The cryptocurrency space needs regulatory certainty and the current definition of cryptocurrency is too broad, said the CEO of crypto finance startup CIrcle, Jeremy Allaire, in a blog post on May 20.

Allaire’s statement comes in the wake of the “geofencing”  of nine different coins for United States-based clients of digital currency exchange Poloniex, which is owned by Circle Internet Financial. Poloniex said then that the decision was motivated by the uncertain regulatory environment in the country.

In the recent post, Allaire stated that digital assets represent a fundamental new class of financial instrument and should not be considered securities, commodities, or currencies, while the U.S. Securities and Exchange Commission (SEC) “is forced” to develop guidance regarding cryptocurrencies deeming them securities. Allaire argued that existing laws cannot address the cryptocurrency issue. Concluding his statement, he said:

“We urge lawmakers to recognize the unparalleled economic power that permissionless innovation has unleashed and to act to let crypto and blockchain technologies flourish. We know lawmakers want to support economic growth and want them to seize the opportunity to lead the charge.”

As earlier reported, the recently reintroduced Token Taxonomy Act — which seeks to exclude digital currencies from being defined as securities — will create a de minimis tax exemption for crypto transactions under $600, according to the executive director of Coin Center, Jerry Brito.

Brito said that, under current laws, one is technically obligated to report capital gains when using crypto to buy simple things like a laptop, plane tickets, or even in writing a smart contract.

Yesterday, Cointelegraph reported that the U.S. Internal Revenue Service (IRS) prioritized issuing tax guidance on cryptocurrencies. In a letter addressed to Rep. Tom Emmer, IRS Commissioner Charles Rettig stated that the agency “made it a priority” to issue relevant guidance. The instruction will specifically cover issues such as acceptable methods for calculation cost basis, cost basis assignment; and tax treatment of forks.

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IMF Spring Meetings: Digital Money Is Imminent, But No Decentralization in Sight

As the IMF and the bosses of central banks gather to talk digital money, concerns of stability and institutional trust dominate the discussion.

The custodians of global financial order have been prominent in crypto news recently. The weekend kicked off with the announcement of the International Monetary Fund (IMF) joining forces with the World Bank to launch a private blockchain coupled with a “quasi-cryptocurrency” for training purposes, then continued with the Spring Meetings of the two organizations’ Boards of Governors in Washington, D.C., which ran throughout the whole week.

Although it would be an overstatement to claim that distributed ledgers were particularly conspicuous on the forum’s overall agenda, the program included a series of fintech workshops, as well as at least a couple of major talks relevant to grasping where global regulators stand on some issues pertinent to crypto and blockchain applications. Situated in the context of the IMF’s previous statements and actions, the ideas expressed at the meetings can update our understanding of the intellectual currents that shape how international financial institutions envision the future of blockchain technology.

Spring Meetings

Christine Lagarde, the IMF’s managing director, moderated the seminar entitled “Money and Payments in the Digital Age” that featured Benoît Cœuré, a board member of the European Central Bank (ECB); Central Bank of Kenya Governor Patrick Njoroge; JPMorgan Chase Chief Financial Officer Sarah Youngwood; and Jeremy Allaire, co-founder and CEO of crypto finance firm Circle. Predictably, speakers who represented established financial institutions and the fintech entrepreneur offered vastly different opinions on whether the digital payments model is superior.

While JPMorgan Chase’s Youngwood touted the bank’s new digital coin that is used for instantaneous settlement of wholesale payments, the Central Bank of Kenya’s chief talked about mobile-based payment service M-Pesa and ECB’s Cœuré introduced TIPS — a cost-efficient European service for the settlement of instant payments. Allaire, on his part, painted a future marked by a “fundamental redesign of how civic societies work,” in which economic activity is fully automated, effectively eliminating the notion of payments as we now think of them. Notably, he argued that not only the decentralized forms of money underlain by permissionless public ledgers would benefit from the internet-like open design, but sovereign digital money would as well.

Cœuré — the same ECB official who once had reportedly called bitcoin “the evil spawn of the financial crisis” — expressed confidence that central bank-issued digital money would be prominent in the financial system of the future, but warned that “decentralization, if not properly managed, can introduce fragility” to the system.

International Monetary Fund Managing Director Christine Lagarde along with Jeremy Allaire, Benoit Coeure, Patrick Njoroge and Sarah Youngwood talk about Money and Payments in the Digital Age at the IMF Headquarters during the 2019 IMF/World Bank Spring Meetings on April 10, 2019 in Washington, D.C. IMF Staff Photograph/Stephen Jaffe

International Monetary Fund Managing Director Christine Lagarde along with Jeremy Allaire, Benoit Coeure, Patrick Njoroge and Sarah Youngwood talk about Money and Payments in the Digital Age at the IMF Headquarters during the 2019 IMF/World Bank Spring Meetings on April 10, 2019 in Washington, D.C. IMF Staff Photograph/Stephen Jaffe

An overarching motif that loomed large in almost every speaker’s account was trust. However, if Circle’s Allaire was talking about trust in open networks based on public infrastructure for money, in which clearance and settlement are decentralized, other panelists obviously meant a different kind of trust — i.e., trust in the incumbent financial institutions that has to be maintained and preserved.

In an interview after the panel, Madame Lagarde made a nod to blockchain “disruptors,” who are “clearly shaking the system” and “changing business models of commercial banks.” Yet, she sounded much more in line with Cœuré than with Allaire when she remarked that she remains concerned about the trust and stability of the system, and that the IMF doesn’t want “innovation that would threaten stability.”

Interestingly, the IMF head noted, apparently in response to Allaire’s mention that Facebook was expected to roll out its own coin soon, that the organization is watching “data collectors” entering the financial space and is ready to regulate. The remark could be relevant to social services with payment ambitions beyond just Facebook, particularly the Telegram Open Network.

“New Economy Talk: CBDC: Should Central Banks Issue Digital Currencies?” was another event among the Spring Meetings germane to the domain of crypto. Moderated by Tommaso Mancini-Griffoli — the deputy division chief in the IMF’s Money and Capital Markets Department — the event had Deputy Governor Cecilia Skingsley of the Swedish Riksbank and Bank of Canada’s Deputy Governor Timothy Lane pondering the prospects of digitizing sovereign money.

In this discussion, the word “cryptocurrency” was mentioned just once, yet in a rather revealing context. When talking about the possible design and functionality of central bank digital currencies (CBDCs), Riksbank’s Skingsley contended that such an instrument will have to be highly functional and the best at fulfilling citizens’ needs — otherwise, “other versions of money could come in, perhaps cryptocurrency,” implying that government-issued digital money would stand in direct competition with its decentralized counterpart.

Lane expressed a number of concerns over the potential tokenization of central banks’ liabilities, including systemic risks like facilitating bank runs and displacing financial intermediation. He also pointed out that, with the existing cryptocurrencies, “anonymity is a big issue” and any digital instrument that Canada would develop will ensure that law enforcement has access to transacting parties’ data, if needed. By and large, the discussion proceeded along the lines of designing a convenient digital reincarnation of fiat money rather than envisioning paradigmatic changes in the nature of state-issued money that a crypto-libertarian would welcome.

Insights from Finance and Development

The ideas on digital money that most of the financial world’s notables expressed on the floor of the IMF-hosted forum largely resonate with those articulated in the June 2018 issue of the organization’s quarterly magazine, “Finance and Development,” dedicated almost entirely to the future of currency, and heavily focused on the threats and promises of blockchain. This issue — which, at the time of publication, did not make too much of a splash in the crypto community — is nevertheless a remarkable document that captures some themes that seem to remain influential with many financial bosses up to this day.

Title page of the June 2018 issue of Finance and Development, a magazine released and published by the International Monetary Fund

Title page of the June 2018 issue of Finance and Development, a magazine released and published by the International Monetary Fund

Some of the points that the authors raise are hardly shocking. Martin Mühleisen, director of the IMF’s Strategy, Policy and Review Departmentacknowledges blockchain’s capacity to revolutionize the world of finance, but reiterates common concerns over its potential to facilitate illicit activities. Andreas Adriano, a senior communications officer in the IMF’s Communications Departmentapplies Ken Galbraith’s taxonomy of financial bubbles to what he calls “crypto euphoria,” observing that most of the common features of historic financial euphorias are also visible in the irrational exuberance surrounding crypto assets.

In their primer on cryptocurrencies, economist Antoine Bouveret and the assistant director of the IMF’s Strategy, Policy and Review Department, Vikram Haksarpoint out that such assets are often costly to produce and that “decentralized issuance implies that there is no entity backing the asset.” They also mention that crypto assets might pose a threat to central banks’ ability to conduct monetary policy by weakening their centralized control over the money supply.

Perhaps the most forceful, in-depth and also the most unsettling analysis presented in the issue is the one penned by Dong He, deputy director of the IMF’s Monetary and Capital Markets Department. He affirms that crypto assets challenge the model of state-issued money and the dominant role of central banks, thus presenting direct competition to fiat money — a point that Riksbank’s Skingsley shared the other day. Further, he admits that the rise of cryptocurrencies might foreshadow a paradigmatic shift from account-based to token-based payment systems. He also contends that a situation in which crypto assets come to define the unit of account would mean irrelevance of central bank’s monetary policy.

His solution? Make fiat money — digital or not — a more attractive unit of account and settlement tool, naturally. That is also something we’ve heard a lot throughout the Spring Meetings sessions. But he also adds this to his recipe:

“Government authorities should regulate the use of crypto assets to prevent regulatory arbitrage and any unfair competitive advantage crypto assets may derive from lighter regulation.”

In other words, the analyst suggests that regulation should be there not to protect consumers from fraud — or to stifle the financing of terrorism — but rather, it is needed to protect the dominance of the incumbent financial instruments and institutions. That is a step further from the usual way of rationalizing regulatory pressure on crypto, if at lease a more honest one.

Arguably the most refreshing article of the June issue of “Finance and Development” was written by a historian. Princeton professor Harold James reminds us that “money was almost always an expression of sovereignty,” which is a concise explanation of why crypto enthusiasts shouldn’t expect central banks to cede any of their power to open, decentralized financial systems. James also offers an elegant take on what he calls a “transformational shift in the perception of fundamental value.” He puts it that, in the past, value was created when humans applied labor to nature. In the near future — and bitcoin appears to be a harbinger of this change — value may arise from the application of nonhuman intelligence to stored energy.

Words and deeds

Whenever she talks about blockchain, Lagarde almost invariably brings up this ever-recurring maxim: Financial authorities should go about distributed ledger technology with caution, yet make sure that regulation does not stifle innovation. But what does this mean in practice? It seems that, feeling the weight of the responsibility for global financial stability on its shoulders, the IMF is not eager to rush the advent of a decentralized monetary system. Experiments will be tightly controlled, in a sandbox style; jurisdictions that try to shoot ahead too enthusiastically, like the Marshall Islands and Malta, will be reminded that they better simmer down. Stability and trust should remain paramount — and that means stability and trust in the incumbent institutions.

As is visible in the recent discussions and the analysts’ prior work, central bankers globally are well aware of the threat that open blockchains could pose in the near future to the monetary system that they are in charge of. The next decade will almost definitely see the emergence of CBDCs in many jurisdictions, but it is unlikely that these financial vehicles will be fundamentally different from a digitized version of the existing, centrally issued and controlled fiat money. The incumbents have resources to make digital fiat appealing to consumers and the regulatory power to limit competition from potential decentralized alternatives, so it may take a while before blockchain-powered, peer-to-peer financial networks have a chance to give central banks a run for their money.

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Circle Doubles Minimum Bitcoin Trade To $500K As CEO Says Volumes Will Rise

The over-the-counter (OTC) trading platform of Goldman Sachs-backed financial services startup Circle doubled its minimum Bitcoin trade amount to $500,000 amid what it calls a “robust market”, Business Insider reports Monday, April 23.

In comments to Business Insider, Circle CEO Jeremy Allaire said the move preempts a U-turn in crypto trading markets, which saw volumes decline in Q1 this year as Bitcoin and altcoin asset prices fell.

“The minimum ticket size has moved up to $500,000 with an average of $1 million,” he told the publication, noting the company’s OTC platform Circle Trade routinely handles transactions over $100 mln, adding “[t]hat watermark will continue to rise.”

Circle has made a conspicuous return to the cryptocurrency industry this year, most directly in its acquisition of major crypto exchange Poloniex in February.

Going forward, proponents of OTC trading see advantages in offering large-scale investors a method to interact with Bitcoin ‘wholesale,’ an option which traditional exchanges with less liquidity cannot match.

“If I have $5 million, I can’t do that trade on GDAX,” an unnamed industry source added to Business Insider.

Last week, Cointelegraph reported on rumors Brazil’s biggest investment firm was preparing to launch an OTC exchange of its own.

Hitting $9,000 on April 21 and fluctuating around that mark since, Bitcoin continues to spark fresh optimism about prices hitting new all-time highs in the near future, with recent predictions from industry insiders running as high as $250,000 per coin.

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Post Poloniex, Circle Hires Ex-Square Exec As Its New Chief Financial Officer

Payment services startup Circle announced it has hired former Square, Boxed, and Salesforce executive Naeem Ishaq as its new CFO, Treasurer & EVP of Risk in a blog post published March 26.

Ishaq, whose background Circle CEO Jeremy Allaire describes as “noteworthy and highly relevant for Circle,” joins the company just a month after a $400 mln deal saw it buy major cryptocurrency exchange Poloniex.

“Naeem joining Circle comes at a transformative time for our company considering the recent acquisition of Poloniex, our recently introduced app Circle Invest, and continued global expansion and growth for Circle Pay and Circle Trade,” Allaire continued.

Circle had previously adopted an increasingly hands-off approach to cryptocurrency, halting support for its wallet and exchange in December 2016.

The Poloniex acquisition appears to have kicked off a resurgence, Circle announcing the exchange’s presence will be bolstered via expansion into Asian markets.

The company’s new Circle Invest app, which offers exposure to crypto assets, itself went live in 46 US states earlier this month.

Ishaq’s previous experience is also notable, as his former employer, payment service Square, has also become increasingly bullish on cryptocurrency via a Bitcoin integration this year.

“At this pivotal stage, we are growing from a startup to leading global company, just as crypto goes from early adopter novelty into being foundational to the future of society and the economy,” Allaire added in subtle praise for cryptocurrency’s progress.