Circle, the Goldman Sachs-backed start-up that acquired crypto exchange Poloniex not too long ago, is now planning to launch a cryptocurrency tied to the US dollar in order to enable businesses and individuals transfer value faster, cheaper and more efficient. Each token will be backed by reserves of US dollars and they will be called Cirle USD Coin (USDC). Jeremy Allaire, CEO of Circle told CNBC:

“It unlocks an incredible amount of power for the dollar,” expressed Allair. “It’s basically a dollar that operates on blockchain.”

This is how the dollar pegged currency will function: Circle customers will need to hold $1 for evey USD Coin thus resulting in a stable price thanks to the reserves and real liquidity. Once the USDs are converted to USDC’s they can be transferred within seconds with the help of blockchain technology.

This is actually a fair way to create a stable coin as the process in not over complicated and fully transparent as Circle is operating in a regulated market. Circle’s solution is not the first attempt to do so, we already have Tether for instance, but Allaire told CNBC that there should be a “compliant alternative” to Tether, which has a grand total of $2.2 billion marketcap already, according to CoinMarketCap.

“When I look at the convergence of traditional finance and the crypto space, it’s begging for that,” added Allaire. “There are a number of banks who are excited about it and will support it.”

USDC is using ethereum’s blockchain, and the framework is going to be open sourced enabling multiple developers to work on the project. Another potential selling point is that this currency will potentially be supported on every platform that Circle owns thus it will have a real adoption from the first minute.

Circle is currently worth around $3 billion after a successfully raising $110 million from investors including Bitmain, Pantera and Blokcchain Capital, Breyer Capital, Tusk Ventures and IDG capital in the last round. Let’s see whether this new project could shake things up around the monopoly Tether possess currently.