There are pivots and then there are wholesale about-faces. Circle’s choice to halt bitcoin trading in favor of doubling down on more traditional mobile pay certainly counts as a bit more of the latter than the former.
Circle launched three years ago mostly as a consumer finance firm built on a bitcoin backbone. Customers were able to buy and sell bitcoin on the platform — and as a blockchain-based firm, Circle was able to snap up around $70M in investor funds.
But buying and selling bitcoin is now officially finished on the Circle platform, supplanted by “full messaging features” that will transform Circle into an app that more closely resembles What’sApp or Messenger with the payments features more prominently displayed.
Bitcoin isn’t totally gone from Circle. Users, for example, won’t be able to send bitcoin back and forth via Circle, but on the back end, bitcoin will still be the platform’s settlement token.
To make that blending possible, Circle is also launching the Spark protocol, which allows digital wallets to use blockchains to exchange value. Circle will also be partnering with Coinbase — insofar as it will be directing all of its still bitcoin-enthused customers over to Coinbase where the blockchain action carries on.
Circle will also be moving into Philippines and Korea via partnerships with Korea’s Korbit and the Philippines’ Coin.ph. U.S.-based customers can now use Circle as a remittance service in those nations.
The bigger question for Circle is how it will attract customers now that it so strongly resembles services already in the market. Services that are quite popular already — customers could use Circle to send funds back and forth, but they can also use Facebook’s Messenger service or WeChat — and so far, what square needs to be circled here is how Circle will lure customers away, particularly since it is dropping its bitcoin differentiator.