Barclays PLC has become the first U.K. bank to partner with a cryptocurrency company, teaming up with social-payment app provider Circle, which says it can now offer free dollar-to-pound transfers after its London launch.

Goldman Sachs-backed Circle, which uses bitcoins as a means to transfer money, launched in the U.K. on Wednesday after being granted an e-money license from the Financial Conduct Authority. The license allows the Boston-based startup to transfer money electronically, exchange currencies and make international payments.

It’s the first time a digital currency company has been granted this kind of license by the U.K. financial watchdog.

Its partnership with Barclays BARC, +2.45% BCS, +3.18% means Circle can use the bank’s infrastructure to carry out transfers between any U.K. bank account and the bitcoin app. It also lets the startup move pounds via the blockchain — the public ledger of transactions in bitcoins.

Specifically, the London-based bank is providing the account that Circle needs to hold pounds until the money has been transferred to a user’s account. Circle isn’t licensed to hold customer cash on its own.

“We support the exploration of positive uses of blockchain that can benefit consumers and society,” Barclays said in an emailed statement.

The payment app transfers the user’s money by first converting the cash into bitcoins. It then moves it into the recipient’s bank account in either dollars or pounds.

Circle, which is backed by $76 million in venture capital from Goldman Sachs GS, +0.46% and IDG Capital Partners, among others, launched a dollar transfer service for U.S. users last year. With its push into Britain, the payment app will now allow cross-currency transfers of pounds and dollars without fees, the company said.

Circle told MarketWatch it plans to launch a euro-based service later this year, letting consumers move money between the three major currencies.

“Sean and I started the company with a vision that money should work the way the Internet works. We have a world where we can instantly send and receive communication, emails, messaging. We can share any kind of content with anyone in the world,” said Circle CEO Jeremy Allaire, who founded the company with fellow Internet entrepreneur Sean Neville.

“You can do it instantly, globally, and you can do it for free. And that model we really wanted to bring to the money world,” he added.

The British launch was welcomed by the U.K. Treasury, who called the push into London’s financial center and the Barclays partnership “major milestones.”

“Together they prove our decision to introduce the most progressive, forward-looking regulatory regime is paying off and cements our status as the world’s fintech capital,” said Harriett Baldwin, economic secretary to the U.K. Treasury, in emailed comments.

Source: marketwatch.com

http://www.marketwatch.com/story/barclays-backs-uk-launch-of-bitcoin-payments-app-2016-04-06

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