Circle, one of the most respected and securely funded cryptocurrency startups, recently announced the immediate suspension of its research section, a move that is in line with the overall slowdown of the financial technology sector in the United States. It is not clear whether the cessation of research reporting at Circle will cause employees to be laid off, but the company had previously reduced its payroll by 10 percent earlier this year.
Circle research reports are closely followed by institutional investors and hedge fund managers. Clients received these reports on a weekly, monthly, and quarterly basis; the schedule and content were similar to what clients expected from a company owned by investment banking firm Goldman Sachs, meaning that the content was of Wall Street caliber.
In addition to laying off employees and cutting back on market research, Circle is also shutting down its Circle Pay mobile app in late September. While the Circle Pay app is probably one the fanciest offerings in the crowded digital wallet space, executives are not convinced that this is the right direction for the company. The regulatory climate for digital payments in the United States has become quite restrictive, and competition from more established players such as Venmo makes it difficult to lead this segment.
Circle will continue to operate the Poloniex cryptocurrency trading platform, which is reportedly enjoying a period of brisk activity thanks to the Bitcoin rally that has unfolded over the last few months. Parent company Goldman Sachs is still very interested in the development of USD Coin, a cryptocurrency token pegged to the value of the United States dollar. USDC is one of various efforts to make a digital version of the greenback, at least in terms of popularity because this is something that the U.S. Treasury and the Comptroller of the Currency are unlikely to approve; nonetheless, the backing of Goldman Sachs puts USDC ahead of the competition.
Bitcoin has been feeling the effects of the ongoing cutbacks implemented by major cryptocurrency players such as Circle. The leading token has fallen off its $10,000 high of the year to $8,840.