The Irish Time’s Pamela Newenhan and co-founder of Circle Sean Neville (who have a base in Dublin’s Guinness Enterprise Centre) took to the stage of the Money Summit on Thursday 5th November. It was a rapid fire fifteen minute talk, so this articles gives an outline of the talk. I’ll just qualify that there may have been some paraphrasing to keep up, so the transcript below is not verbatim.
A packed room saw the two join the stage, and they got stuck right in. Sean opened saying that Circle is consumer finance company letting people sending funds in USD as well as bitcoin.
Pamela Newenham: Can Bitcoin be a legitimate currency?
Sean Neville: We didn’t see ourselves as a bitcoin company. It’s an enabling technology, and we can leverage bitcoin and blockchain tech to share value. It’s easy to share photos etc, but money is stuck in an old system. Initially Circle bitcoin only, although the product is very different in the US than Europe, although EU currencies are due imminently. In the US people can pay bills or use the blockchain to send money across the world.
PN. Can bitcoin replace conventional money?
SN: Someone has to value the commodity for a transaction to be settled. Using bitcoin to move between currencies is like using an open payment rail.
PN. Bitcoin has a bad rep, is it deserved?
SN: If mainstream consumers have heard anything about bitcoin, it’s probably negative. Bitcoin has a bit of a branding issue. Take out bitcoin, put in blockchain and you often get a better reaction.
There are misunderstandings about what it is, how it works. Lots of bad things go through the traditional financial system. It’s probably less so on the blockchain, as it’s fully traceable
PN. About the blockchain, what less obvious applications are there?
SN: It’s interesting at the start of a new technology. People at the start are probably short sighted, the impact happens later or differently than we expect. There’s lots of applications other than using blockchain for payment rails, more involved financial instruments, smart contracts, timed escrow, new types of identity and authentication. That’s just touching the top of what it can do.
PN. Moving onto Circle, you operated for a year in stealth mode.
SN: We could have stayed in stealth code for longer, there’s a lot of licenses and approvals that were needed. It was the first time in 20 years doing
software that I couldn’t release something because so many people had to say ok. We did an initial bitcoin product and launched globally, and iterated from there, getting three rounds of funding including Goldman Sachs. The team has put together a great product, and we’ve been working on the need to acquire licenses, talk to regulators and so on. This takes time.
PN. Alternative coins, will Circle support them?
SN: There’s different ways to look at money, hasn’t been metal backing currencies for a while. Where the blockchain shines is it shows the business model (tax) that financial institutions put on this process. Will people be using it in 20 years? I think what we’re doing now will have an impact then. Back in the early internet, Netscape was the main thing. Now everyone uses Chrome/Safari etc.
That could happen to bitcoin. We didn’t build a bitcoin company, we built a platform on which we can build a large number of services. So we may
PN. Bitcoin volatility, what do you think?
SN: If I hold USD, it doesn’t fluctuate. If I want to send to bitcoin, Circle is doing the bitcoin distribution on my behalf, so me as a user I’m not exposed. If I want to give me the volatility, such as the last few days, I can do that through the app.
PN. Does circle insure coins against threats?
SN: Marsh Insurance and underwriters for our bitcoin, FDIC for USD holdings.
PN. You want to have financial payments to be free?
SN: When you look at money, it’s data and databases. We look at it with a second lense and the human value of money. We’re not trying to create a
banking app, we want to build a messaging experience. We’re building a rich and engaging experience. We’re not immediately focused on revenue generation. We want to have sending and receiving money for free. We want some offsets, but not focused on optimisation for revenue. Although our investors are giving a little time.
PN. What’s the revenue plan?
SN: [Editor note He wouldn’t answer directly] But we want to let people be their own banks. Fully commoditised open eco system, with lots of other
people using it other than Circle. For more traditional banking instruments, we might consider it.
PN. Where do you see bitcoin and the payments industry in 20 years?
SN: Very different, I don’t know exactly how. When he was building in the 90’s and 00’s, I didn’t see what’s here now. I think value of proprietary
systems for data will diminish. Business models will change.