Thursday , September 21, 2023

Circle Internet Bids for Taiwan’s Cybavo in a Move to Boost Its Digital Dollar Stablecoin

Circle Internet Financial Ltd. said early Friday it has agreed to acquire Cybavo, a Taiwan-based developer of tools for digital-asset custody and blockchain development. The Boston-based company, perhaps best known as the developer of USD Coin, a stablecoin linked to the U.S. dollar, said the acquisition will provide the technical infrastructure to enable integration of various blockchains, blockchain protocols, and so-called smart contracts. Terms of the deal were not announced.

In particular, Circle sees the acquisition as a means to boost adoption of USDC, its core product, at a time when governments and businesses are contemplating digital versions of national currencies. Cybavo’s platform is said to simplify software development for blockchain products in much the same way so-called cloud services have done in recent years for various technologies.

“Cybavo co-founders Paul Fan and Tim Hsu have built an incredibly impressive product,” Jeremy Allaire, Circle’s cofounder and chief executive, said in a statement. “They are unlocking value for developers and operators across nearly every major sector impacted by crypto and Web3.” Web3 is a term referring to a developing version of the Internet based on blockchain technology and featuring transactions involving so-called non-fungible tokens.

Cybavo’s Fan indicated this future Web may be coming sooner than many expect. “Web3 apps will cross the chasm over the next few years,” he said in a statement. “Today’s news and the future of what we build with Circle will bring the power of the global crypto economy to everyone everywhere.”

News of the Cybavo deal emerges during a busy week for Circle. Concord Acquisition Corp. announced on Monday its acquisition of Circle that values the company at $4.5 billion, announced last year and originally set for Friday, will now be finalized Dec. 10 instead in a deal that will result in Circle’s emergence a publicly held company.

On Wednesday, Circle’s head of policy, Dante Disparte, declared central bank digital currencies a “preposterous idea” while contrasting them with Circle’s own USDC stablecoin. His statement came during a panel discussion at Consensus 2022, a conference in Austin, Texas, sponsored by Coindesk, an online newsletter that covers blockchain matters. Disparte formerly served as head of policy for Libra, a digital currency project originally proposed in 2019 by Facebook Inc. (now Meta Platforms Inc.).

Lael Brainard, vice chair of the Federal Reserve, had earlier indicated CBDCs and stablecoins could exist as parallel currencies. Her statement was released in advance of her appearance before the House Financial Services Committee this week.

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