Circle, the Goldman Sachs-backed payments company has acquired Poloniex on February 26, 2018, according to a press release on the Poloniex website. Poloniex is a cryptocurrency exchange and current users are able to trade against Bitcoin, Ethereum, Monero and Tether. With a payments company backed by one of the world’s largest investment banks coming into the fold, there will soon be the introduction of fiat trades against the US dollar and other major world currencies, as described in the press release. This puts them in the running with Coinbase and Gemini, as they race against Bittrex to be the next US crypto exchange to offer trades against fiat.
Poloniex is a unique cryptocurrency exchange in that it offers margin trading, meaning that users may borrow crypto from lenders in order to buy in higher volume. Currently, Poloniex generally offers 2-60 day loans in BTC with interest rates ranging from less than 0.01% for a two-day loan, to over 0.31% for a 60-day loan. The system will match loan offers, currently at a volume that fluctuates around 500-1000 BTC, with loan demands at a volume that comes in below the total offer amount. Should Circle Payments / Goldman Sachs introduce not just fiat trades, but also fiat margin trading, we could see the acquisition of Poloniex as a major game changer in how we buy and sell digital assets.
Also of note is that Poloniex is one of the few platforms that offers trades against Monero (XMR). If this move results in a spike in volume on Poloniex, it could result in higher volume for XMR as well. Monero is a privacy coin that appears to have solid technology. It is secure, private and untraceable, according to the website. It should be noted that this is the opposite of what one would expect with financial institutions like Goldman Sachs. It would probably be unreasonable to assume any negative outcomes for Monero in the near future as a result of the Poloniex acquisition, especially since it’s fungible, meaning that units of Monero cannot be blacklisted by vendors or exchanges due to their association in previous transactions. However, do keep Monero on your radar and pay attention to any upcoming changes to Poloniex and its trading pairs.
According to the press release, Poloniex has a shared vision with the Circle team where decentralized cryptocurrency protocols “create a far more open, inclusive, and evenly distributed global economy.” Circle provides liquidity to institutions and investors, including an ecosystem that centers around Circle Pay and the soon-to-be-released Circle Invest.
Poloniex has assured the community that it intends to remain committed to maintaining the functionality in its existing platform, and that digital assets will remain intact and secure as they expand on their global platform and token marketplace. Part of the global plan includes localizing Poloniex to more geographies, as well as “fiat connectivity” across major world currencies. According to a blog post on Circle, trades against USD, EUR and GBP will soon be possible as they expand their compliant Pay, Trade and Invest products.
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