The Goldman Sachs-backed payments firm Circle raised $110 million in an investment round managed by China’s Bitmain, one of the largest crypto mining firms. After the funding round, Circle’s total valuation reaches $3 billion, which is six times more than the capitalization in 2016. The firm, which recently acquired crypto exchange Poloniex, also announced that it would issue a USD-backed digital currency to streamline USD transactions and bring cryptocurrencies closer to everyday business.

The USD Coin (USDC), as the ERC20 token is called, aims to address volatility, which is still one of the essential problems of today’s cryptocurrencies. Because of the fluctuations, most cryptocurrencies cannot be used for regular payments.

Circle CEO Jeremy Allaire told CNBC:

“There are a number of banks who are excited about it and will support it.”

“It unlocks an incredible amount of power for the dollar. It's basically a dollar that operates on blockchain,” he added.

The new token will be based on the Ethereum blockchain, and the users will be required to hold one US dollar for each USD Coin, thus keeping the rate stable. We have seen a similar concept with Tether, which is the 16th largest cryptocurrency by market cap, with a $2.2 billion valuation. It fluctuates in a very narrow range, generally between $0.95 and $1.02.

However, Tether has been criticized for not being open enough about its holdings and avoiding any type of audits. Allaire said that his coin should become a compliant alternative to Tether.

Once the user converts his fiat dollars to USD Coins, he will be able to move the funds within seconds on the blockchain, Circle CEO said. He revealed that soon we would see tokens backed by euro or British pounds.

Even though Ethereum is currently used as the base layer for the USD Coin, Allaire said that it could change if a better alternative shows up.

“Ethereum is the best bet but it's not necessarily the end game,” he stated.

The $110 million investment round led by Bitmain will fund the new project. This round became the largest venture capital round raised by a blockchain or crypto firm, surpassing R3’s $107 million round in 2017.

The framework for the open source fiat-backed token will be developed and managed by CENTRE, a Circle subsidiary that is planned to become independent to provide neutral oversight of Circle’s offering and allow other entities to join the network.