Bitmain, a multi-billion dollar cryptocurrency mining equipment manufacturer based in China, has led a $110 million Series E funding round for Circle, a blockchain-focused financial company, in support of Circle’s short-term plan of launching a stable cryptocurrency that is in line with Bitmain’s vision of establishing private central banks backed by cryptocurrencies. Stable CryptocurrencyPreviously, Circle operated a brokerage service to enable users to purchase and sell cryptocurrencies like bitcoin with ease. But, after obtaining more than $130 million in funding from Goldman Sachs and IDG Capital Partners, Circle pivoted to a more general money transferring company and has since utilized blockchain technology as the base layer of its infrastructure. This week, Circle announced its re-entrance into the cryptocurrency sector with the backing of Bitmain, unravelling its ambitious plans to release a stable cryptocurrency to compete with USD-backed Tether, MakerDAO, and Basis, which also recently raised over $133 million venture capital firms, as CCN previously reported. Currently, Tether, which according to some reports has ties with major cryptocurrency exchange Bitfinex, is dominating the cryptocurrency sector as the premier stable coin backed by the US dollar. Tether-to-BTC on Binance, the world’s most widely utilized cryptocurrency exchange, is the most frequently traded cryptocurrency pair on the platform which does not support fiat deposits and withdrawals. In an interview with Joon Ian Wong of Quartz at Consensus 2018, where the company announced its investment in Circle, Bitmain founder and CEO Jihan Wu stated that Accell, General Catalyst, and IDG participated in the $110 million investment round.”Our investment team is still quite small and we work fast,” Wu told Wong, noting that the funding round was closed within three weeks since the initiation of the discussion. Although Bitmain is focused on investing in blockchain projects as of recent, Wu stated that his team has worked in a swift manner with Circle to back its upcoming ventures. During the interview, Wu emphasized that Bitmain’s investment in Circle was focused on the company’s plans to develop and deploy a stable cryptocurrency called Circle USDC, which will be backed by the USD, like Tether. In previous interviews, Wu explained that he foresees the financial sector to cooperate alongside private central banks backed by cryptocurrencies, and the development of stable cryptocurrencies takes the possibility of establishing private central banks one step closer.”It’s a very important enabler for a private central bank. Currencies can do good or bad things, so we need a certain framework to limit money laundering risks. If we have an open platform we can limit the potential negative things,” Wu said. Edge Over TetherBitmain is backing Circle’s plan to create a competitor to USD-pegged “stablecoin” Tether. Some reports by institutions like BitMEX research have been able to track the US dollar reserves of Tether to a bank in Puerto Rico called Noble Bank.”Over the weekend, the Commissioner of Financial Institutions of Puerto Rico released aggregate financial-system data for the calendar year ended 2017. Bank deposits in the International Financial Entities (IFE) category, which includes Noble Bank, were $3.3 billion, up 248% in the quarter ended December 2017. Total assets in the category were $3.8 billion, up 161% in the quarter,” read the BitMEX research. However, apart from the last audit from Friedman LLP in 2017, Tether has not released any audit results since. The struggle of Tether to release audit reports and clarify its USD holdings led speculators to emerge and investors to question the legitimacy of Tether. Reports by BitMEX research and other independent media outlets have revealed that Tether is likely legitimate and its USD holdings are well managed by verifiable banks. But, the edge Circle may have over Tether is, given the involvement of Goldman Sachs and major cryptocurrency firms like Bitmain, it will be able to regularly provide audit results to provide solid evidence to investors about its holdings in US dollars