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    Goldman Sachs Jumps on the Bitcoin Bandwagon Investing $50 Mln in Circle

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    The investment bank has become the first major Wall Street bank to invest in a digital currency company, leading the latest funding round for Circle, a consumer finance startup.

    The Wall Street investment bank Goldman Sachs on Wednesday became the first major financial institution to invest in bitcoin, after leading the latest funding round for digital currency company Circle Internet Financial, worth $50 million in investment for the startup. 

    Goldman Sachs is joined by China-based IDG Capital Partners in investing in the company, announced Jeremy Allaire, CEO and founder of the digital currency company on Wednesday:

    "We could not be happier with our new strategic investors. They bring unique, powerful capabilities and capital that will help us continue building a new kind of global consumer finance company, one based on open platforms, open source software, and ubiquitous mobile devices."

    Circle announces the closing of the investment round in this tweet.

    At the same time as announcing the new investment, the start-up also revealed the launch of a new account feature, "giving Circle customers the ability to hold, send, and receive US dollars as well as bitcoin –  instantly, securely, and with no fees." Users will be able to hold dollar accounts and pay merchants in bitcoin, without holding bitcoin themselves, offering "the benefits of bitcoin payments without the risk of price volatility." 

    Tom Jessop, Managing Director in Goldman Sachs’ Principal Strategic Investments Group, explained the investment bank's interest in the company in a statement:

    "As the financial services industry continues to become more digital and open, we see significant opportunities in companies and solutions that have the promise to transform global markets through technical innovation."

    The investment follows up interest shown by Goldman Sachs in Bitcoin last year, when its research division published a report on the virtual currency, which concluded that "bitcoin likely can’t work as a currency," but that "the ledger-based technology that underlies it could hold promise."

    Circle launched in October 2013, when it attracted $9 million from venture capitalists in its Series A investment round, which was followed by $17 million raised in its Series B round last year.

    The latest $50 million round of investment is reported to value the company at around $200 million, and follows increasing interest from traditional financial institutions in the cryptocurrency: in January bitcoin wallet and exchange service Coinbase received $75 million investment from backers including the New York Stock Exchange, financial services group USAA and Spanish multinational bank BBVA.

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    investments, Bitcoin, Goldman Sachs, United States
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