Whitepaper
Document Version 2.0
May 2018

CONTENTS
1. Executive Summary		3

3. The CENTRE Team and Organization

19

1.1 The CENTRE Vision

4

3.1 The CENTRE Organization		

20

1.2 Global Payment Use Cases

5

3.2 Circle Corporate Background20

1.3 Crypto Exchange Use Cases

6

1.4 Addressing the Challenges of
Crypto Assets and Public Blockchains			

7

1.5 Service Providers: Compliance, Identity, Fraud, Risk

8

1.6 Governance and the CENTRE Organization

8

2. Technology and Network

9

2.1 Stablecoin Minting and Redemption Sequences10

2.2. Wallet-to-Wallet Transaction Sequence

11

2.3 Merchant Payment Sequence

12

2.4 Crypto Asset Cross-Blockchain Sequence13

2.5 Existing Technology

13

2.6 CENTRE Nodes

14

2.7 Technology Implementation Notes

15

2.7.1 Stablecoin Design15

2.7.2 State Channel Transaction Management15

2.7.3 Chaining State Channels

172.7.4 Node Modules

17

3.2.1 Leadership, Investors, and Directors

20

3.2.2 Circle Products as Catalysts for CENTRE Adoption

21

3.2.3 Regulatory and Licensing Portfolio

22

3.2.4 Technology and IP Contributions		

22

3.3 Organizational Structure and Advisors		

22

4. Additional Information and Updates

22

5. Glossary		

23

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Executive
SummaryCEN TRE WHI TEPAP ER|

D OCU MENT VER S ION 2.0

We live in a worldof open, connected,
global, freecommunication andinformation sharing.

1.1 The CENTRE Vision
The open internet -- a global, distributed networkof computers that share common open software
protocols -- has enabled billions of humans to connect
and share information instantly, securely and withzero consumer cost. The implications for the world
have been profound, and are still unfolding.
The invention of cryptographic assets and blockchainbased computing and data sharing have usheredin the next major era of the open internet.

Just as HTTPS, SMTP and SIP allowed for free
information sharing and communications, crypto
assets and blockchain technology will allow humans to
exchange value and transact with one another in thesame way: instantly, globally, securely and at low cost.
An open internet of value exchange can transformand integrate the world more deeply, eventuallyeliminating artificial economic borders and enablinga more efficient and inclusive global marketplacethat connects every person on the planet. The futureof the global economy is open, shared, inclusive, farmore evenly distributed, and powerful not only for a
few chosen gatekeepers, but for all who will connect.
CENTRE was born out of a desire to realize this vision.

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CENTRE consists of price-stable crypto assets, network
protocols, and business rules which were implemented
in early form over the past several years by Circle,
where the existing technology supports significant
active daily transaction volume. CENTRE plans tocreate a network scheme to manage the creation,
redemption, and flow of these assets under a neworganization independent and separate from Circle.
In addition to governing and auditing network
membership, CENTRE plans to provide technology
to address price volatility and transaction scalability
challenges on top of existing public blockchain
infrastructure. Specifically, CENTRE plans to provide:

where they are provided by a mixture of banks, mobile
carriers, and technology companies. Each purports
to make consumer payments more seamless. Yet
nearly all of these exist as thin shims of software
built on top of the legacy banking and card network
payment system. Each one is siloed and proprietary.
They live in walled gardens, to borrow from theinternet 1.0 era of online services. While we canfreely exchange information and content, and freely
communicate in open and global ways, money andpayments remain locked in the old closed world silos.

• A mechanism for issuing members to mint
and burn/redeem asset-backed fiat tokens,or “stablecoins,” to address price volatility;• Protocols to enable global stablecoin transaction
interoperability on public blockchains using statechannels for increased throughput and scalability;• Network membership rules and smart
contracts to govern, audit, and manage
the licensed network participants that mint,
transact, and redeem stablecoins.
While Circle will become a licensed member of the
CENTRE network, the network scheme and crypto
asset technology will evolve under a new independent
entity, an organization which will govern and further
develop the CENTRE protocols separately from Circle.
This document describes CENTRE, the problems it
is designed to solve, how it is designed to operate,and how it should be managed. To clarify vocabulary,a glossary of key terms is provided as an appendix.

1.2 Global Payment Use Cases
Over the past half-decade, mobile-based digital wallets
have emerged all around the world. These applications
allow people to make person-to-person and person-tomerchant payments using their mobile phones. These
mobile wallets have proliferated in every country,
CENTR ECENTRE is designed to provide a solution and new
incentives for connecting the world’s disparate
digital wallets: a network scheme for fiat token
stablecoins that will allow money to flow between
wallets the same way information moves between
web browsers and servers, email between mailservices, text messages between SMS providers.
CENTRE answers the question “I can instantly text
someone who uses a different mobile carrier thanI do, and I don’t pay money to email someone
who uses a different email service than I do, so
why can’t I use Alipay to pay someone who uses
Square, to pay someone who uses Paytm in India,
to pay someone who uses Facebook Messenger-- instantly, for free, anywhere in the world?”
Sharing content is free for consumers globally and isinteroperable and not locked into specific software|

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1.3 Crypto Exchange Use Cases

programs or devices; so it will be with value, as
money becomes another form of internet content.
Businesses and organizations, either directly bysupporting CENTRE-endorsed stablecoins or
indirectly by working with merchant acquirers, will
be able to support direct payments from compatible
digital wallets. Just as an individual can use her
web browser to browse the content of a businesswebsite, she will similarly be able to use any
wallet she chooses to make payments to people
and businesses who use other compliant wallets
anywhere in any currency instantly and safely.
CENTRE provides solutions for wallets to exchange
value using the same or different currencies. A
payment from one wallet holding tokenized US
Dollars can be sent to another holding Korean Won,
with seamless and instant currency exchange. Of
course, payments can also be made between wallets
in the same currency -- for example, a person using
Venmo could pay another person using Square
Cash or Circle.1 CENTRE protocols aim to manage
exchange rate rules and contracts across different
stablecoin tokens both within and across currencies.

In addition to transactional use cases involving
global payments, stablecoins issued by CENTRE
network members also aim to address key use
cases involving crypto asset exchange risk.
Crypto asset exchanges are online marketplacesin which buyers and sellers come together totrade crypto assets such as bitcoin, ethereum,and others. These crypto assets fluctuate in priceaccording to the market. Tokenized fiat money,such as tokenized US dollars, does not fluctuate invalue, but rather remains price-pegged to the valueof its underlying backing asset (in this example,
the value of one tokenized US dollar is always
intended to be priced at one US fiat dollar).
This makes price-stable tokens useful for providing
fiat connectivity and for hedging risk on crypto
exchanges, particularly on those exchanges that
do not provide traditional fiat on- and off-ramps-- so long as the price truly is stable, and so long as
there are compliant protections around the minting
and redemption of such tokens. A hypotheticalinvestor may choose to protect himself from bitcoin’s
fluctuating value by trading his bitcoin for US dollar
tokens on a supporting exchange, and be certain thatthe value of those US dollar tokens will not fluctuate.
Stablecoins also allow investment products(such as security and equity tokens) on crypto
exchanges to be priced in fiat value rather thanin cryptocurrency value. Tokens such as those
designed to represent equity ownership, interest in
funds, structured debt, loans, dividend rights, andother investment offerings benefit from stable pricepegging for both price and investment return.
Finally and most simply, many exchanges do notoffer any direct on- and off-ramp connectivity
for fiat bank accounts. On these exchanges,

1

To the extent that real companies are used in examples contained in this document, it is for illustrative purposes only,
and in no way indicates that such companies are participating or will participate in the CENTRE Network.

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stablecoins pegged to fiat reserves can provide
the needed integration for basic trading activity
across multiple token types. Stablecoin gateways,
created and maintained by licensed and compliant
network members, become third-party fiat service
providers for fiat connectivity to these exchanges.

when compared to transacting in “tokenizedfiat money” or fiat-pegged crypto assets.
CENTRE meets this challenge by providing astablecoin framework involving “real world” asset
reserves. Each stablecoin token corresponds to a realworld asset that is reserved by an issuing CENTRE
network member and verified and audited by CENTRE.

CENTRE provides the smart contracts and thegovernance that enables issuing network members
to mint such stablecoins for customers who
may then use them to manage risk exposure on
supporting crypto asset exchanges and to invest
in tokens that represent investment products.

For example, a network member such as Circle
might choose to provide a tokenized dollar andtokenized euro, and back such tokens with areserved dollar and euro, with CENTRE auditing
Circle to ensure compliance and solvency. In
theory, another network member might tokenize
another asset, such as gold, and similarly backthat token with physical gold in reserve. Rules
concerning limits, proofs, etc, would be enforcedby CENTRE on each issuing network member.

1.4 Addressing the Challenges of Crypto
Assets and Public Blockchains
As underlying enablers of solutions to theaforementioned use cases, blockchain technology
and crypto assets promise many benefits: atransparent distributed mechanism for managing
trusted updates to shared data among parties
who have varying degrees of trust between one
another; and a transferable store of value thatis not tied to the policy of an issuing sovereign,
but rather value based on the processing power,
work, stake, and markets that support it.

A second challenge with current technology isblockchain transaction throughput. Current publicblockchain implementations do not support highvolume performance, as every transaction is written
to an underlying ledger and printing new blocks tosuch ledgers currently involves relatively high latency.

At the current time, however, existing public blockchain
implementations and crypto assets struggle to fulfill
the vision in part due to three significant challenges:
price stability, transaction throughput, and risks due tothe lack of independent governance over standards
and network participants (particularly those members
offering trade capability and fiat on- and off-ramps).
Firstly, price volatility: In order for global financial
interoperability to function reliably and consistently,
a price-stable medium of exchange and store ofvalue is desired. Transacting in currencies which
fluctuate with extreme volatility creates complexityand fragile settlement contracts, especially

CENTRE addresses this challenge by providing a
protocol for wallets to transact at higher velocity usingstate channels. The initial and final settlement states,
such as account balances, of an interaction between
two participating members is written to the relevant
underlying blockchain, but intervening transactions
are not written to the underlying chain and thus
executed at the speed of the internet. This allows
for payments in tokenized fiat currencies but withthe speed, security, and auditability of blockchains.
A third challenge with existing implementations is
the lack of independent governance over stablecoinproviders. An issuing institution must be independently
audited for solvency and security, otherwise
the underlying asset cannot be independently
verified, and the price stability becomes tenuous.

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This issue has arisen with previous attempts at
fiat-asset-backed stablecoins in production.

to secure PII and reduce the risk of PII leakage
common to existing legacy payment networks.

CENTRE addresses this issue through separationof the CENTRE organization from its issuing
network members. CENTRE itself is not an issuingmember or financial institution, but a network
scheme manager and technology provider. CENTRE
enforces compliance with network rules aroundmembership and behavior in order to ensurestability, accountability, and consumer protection.

1.5 Service Providers: Compliance,
Identity, Fraud, Risk

1.6 Governance and the
CENTRE Organization
CENTRE software implementation is expected to be
managed by a new independent organization andentity created for this purpose. This organization aims
to provide the support, governance, and ongoing
R&D for the CENTRE open source software project.
The organization also expects to offer optional
certification to improve trust in stablecoin-issuingmembers and wallet implementations, certify
regulatory compliance of members, audit asset
backing, and provide support and network operations
to ensure continuous operation of network nodes.

CENTRE plans to offer a service provider
mechanism to support trust and identity decisions,rules for payment settlement and reversals,
and the secure exchange of KYC/AML-related
information to meet compliance obligations.

The organization also aims to pursue businessdevelopment and support programs to usher new
members into the network and commit engineeringand support resources to work on the underlying
crypto infrastructure on which CENTRE is built.

Providers of services for fraud detection,risk assessment, identity management, AML
monitoring, and other services on the network
will be able to implement the CENTRE Service
Provider interface in order to participate in the
network and earn fees for the services they
provide to transacting network members.
For example, when different wallet providers
connect to one another using CENTRE, it is importantthat these participating wallets meet applicable
compliance and regulatory requirements, which
include relevant KYC and AML obligations. CENTRE’s
service provider interface will allow providers
to supply features that support KYC and AML
information exchange while leveraging cryptography

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Network governance is expected to include
distributed consensus and voting mechanismsthat leverage a forthcoming CENTRE-specifictoken, separate from fiat tokens, that is designed
to facilitate such network decision-making.

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2

Technology
and Network

CEN TRE WHI TEPAP ER|CENTRE enables
crypto exchanges andwallets around theworld to interoperate.

D OCU MENT VER S ION 2.0

2.1 Stablecoin Minting andRedemption Sequences
CENTRE contracts manage the minting
and the redemption/burning of stablecoins,which can be used for both the exchange
and wallet interoperability use cases.

By exchanging price-stable tokenized value using astandard protocol across blockchains and fiat rails,
and it enables those wallets to leverage services forcompliance, identity, and risk management via welldefined interfaces for service providers which plug
into the network. The technology provided by CENTRE
supports tokenized fiat money through asset-backed
stablecoins, and enables high transaction throughput
by employing optional state channel implementations.
This section describes this technology in more detail.

Customers who on-board through a stablecoinon-ramp, such as a web application created andmaintained by a licensed CENTRE token-issuingmember, can transfer fiat funds into that CENTRE
issuer’s account. The issuer then executes a seriesof commands with the CENTRE network to verify,
mint, and validate fiat tokens pegged to the valueof those deposited funds. The customer can thentransfer those tokens elsewhere in order to use them.
Redemption follows the reverse sequence: fiat tokens
are burned when a customer visits an off-ramp such asa web application maintained by a licensed CENTRE
issuing member. Upon successful verification andvalidation, funds from underlying fiat reserves would
be transferred to the customer’s external bank.
Consider this example:
David is a trader on crypto exchanges, and he would
like to purchase crypto assets on exchanges that do
not provide direct fiat connectivity to his US bank

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account, and he would also like to hedge his risk
exposure to the volatility of crypto assets on thoseexchanges by maintaining some of his holdings in theform of US dollar tokens that do not fluctuate in value.
David visits a web application created and maintainedby Circle (David could also visit a web applicationof any other token-issuing member of CENTRE, but
in this example he chooses Circle). David signs up
for a customer account, which requires satisfactionof KYC requirements, and then begins the deposit
process in order to turn his fiat dollars into tokenized
US dollars. The deposit process requires David totransfer US dollars from his bank account into theCircle account. David has a limit on the amount offunds he may transfer (and thus the number of US
dollar tokens he may acquire) in a given time period.
Once David’s transfer settles, Circle interacts with the
CENTRE network to execute the process required
to transmit US dollar tokens to David. These tokens
may be taken from existing reserves from Circle’s
buffer of pre-funded fiat assets to increase the speedof the process; if no such reserves are available,
then Circle uses the CENTRE protocols to mint new
tokens. David then receives the tokens, and thevalue of those tokens directly corresponds to thevalue of the funds he deposited into the system.
David may transfer the US dollar tokens to an address
in a wallet or on an exchange so that he may use themto support his trading activity. CENTRE maintains a
blacklist of forbidden addresses in order to protect
David and other network participants from known
bad actors and to support regulatory compliance.

and Circle executes a transfer of underlying dollar
reserves into David’s registered bank account.
The tokens are withdrawn from circulation, andeither placed in reserve to service future requests, orelse burned/destroyed if the value of those tokens
surpasses the prefunded fiat buffer maintained byCircle. This process is subject to authentication
and authorization, verification, validation, andcompliance similarly to the deposit sequence.
Note that access to stablecoins need not be in a
dedicated web application as in this example, but
could also occur in a wallet, exchange, banking portal,
or other product created by a licensed, compliant,token-issuing member of the CENTRE network.

2.2 Wallet-to-Wallet Transaction Sequence
CENTRE can facilitate compliant, reliable, safe,
high-speed transfers between individuals who use
different wallet apps in shared as well as different
currencies without requiring private businessdevelopment negotiations or using private networks.

Consider this hypothetical example whichcrosses apps as well as currencies:
Mobile wallets Paytm in India and Vipps in theNordics could participate in the CENTRE network
and allow their customers to transfer rupees andkronor even though the wallets themselves do
not integrate with one another directly and eventhough they do not share common fiat currencies.

When David -- or one of David’s counterparties
who may have acquired some of the US dollar
tokens -- wishes to redeem the tokens andwithdraw the underlying fiat dollars, then theprocess is executed in reverse: David returns to
the issuing web application (Circle in this example),deposits the tokens into a wallet address madeavailable to his account on that web application,
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Behind the scenes, the Paytm wallet in thisexample could use CENTRE to issue price-stable
INR tokens and publish exchange rates between
that tokenized rupee and other tokenized fiat
currencies. Similarly, Vipps could issue price stablekronor NOK tokens and publish an exchange rate
between that stablecoin and other fiat tokens,such as a kronor-to-rupee exchange rate.

D OCU MENT VER S ION 2.0

If the checks all pass, then the value can be transferredatomically through the use of chained state channels.
To complete this example: Vipps would then update
Alice’s app balance to deduct the appropriate
kronor, and Bob would see his Paytm rupeebalance increased correspondingly. Vipps andPaytm settle asynchronously for a batch of theircustomers when the state channel is closed.

Alice is a customer of Vipps in Norway, and wishes
to send money from her Vipps wallet to Bob in India,
who uses Paytm as his wallet. When Alice begins
her transaction, Vipps refers to its exchange rate
between the kronor and rupee stablecoin tokens;
if Alice accepts this rate, then the transaction willproceed. If Vipps had not had an exchange rate
between these coins but Paytm did, then Vipps
could also have surfaced that exchange rate instead,and sent kronor to Paytm, which in turn would have
converted it to rupees using that exchange rate.
Next, Vipps and Paytm may perform any required
identity checks, compliance requests, or risk
assessments as part of the transaction approval
process. These operations may optionally call on
service providers who provide such offerings to the
CENTRE network in exchange for fees paid in tokens.
For example, to continue the sequence in the VippsPaytm narrative: Vipps may have configured its
CENTRE node to execute its own internal identity
checks, while Paytm may have configured its
node to use a third party service which provides
an identity verification service. Paytm and thecompany agreed to a price for this service, andPaytm can pay that price on a per API call basis
by utilizing state channels and stablecoin token
balances. Other service providers such as those
involving fraud detection or other risk assessment
may similarly be plugged into the sequence.
If any of the checks fail in this example, Paytm or Vipps
can abort the transaction before transferring any value.

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2.3 Merchant Payment Sequence
CENTRE also facilitates compliant, reliable, safe,
high-speed transfers between an individual who uses
a consumer wallet app and a merchant who uses
a point of sale app. The consumer wallet and themerchant point of sale software interact using the
CENTRE standard. This is analogous to a web browser
accessing a remote website using the HTTP protocol
without resorting to use of a closed private network.
Consider the following cross-currency example:
Carol has a WeChat wallet holding a Chinese RMB
stablecoin balance. She is traveling in the UnitedStates and wishes to buy a sandwich from Dave,
who is a merchant who uses a Square mobile pointof sale app that accepts US dollar payments.
In this example, Dave’s Square point of sale app
does not accept RMB or WeChat payments, andWeChat has no direct integration with Square.
However, the payment could work seamlessly
between WeChat and Square, without a custom
private integration between them, if Square and
WeChat supported the CENTRE standard protocols.
In this example, WeChat and Square could facilitate
a payment between their apps for Carol and Dave byagreeing upon an exchange rate between the RMB
and USD tokens that each accepts for settlement.
WeChat’s CENTRE node could surface an exchange
rate from RMB tokens to USD tokens, and executea purchase of USD tokens using RMB tokens for
Carol. The transfer would then involve sending the
USD tokens to Square. As in the person-to-person|

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sequence above, the same service providers (forcompliance, risk, identity, etc.) may also be called
upon as part of the transaction approval logic.

D OCU MENT VER S ION 2.0

exchange supported CENTRE, then Frank could
maintain a state channel with Poloniex.
If Frank wishes to use his bitcoin wallet to send money
to Charlie, who as in the example above maintains
a US dollar balance in his mobile wallet, then Frankcan use his bitcoin wallet to do so since both Frank’s
and Charlie’s wallets interoperate via CENTRE, eventhough Frank does not hold any US dollar tokens.

Naturally, no exchange between stablecoin
tokens would be required if the node owners(WeChat and Square in this hypothetical example)
agreed upon another token for settlement. For
example, if Square accepted RMB stablecoin
tokens directly, then that token could be used
for the same transaction, and the amount of RMB
transferred would be dictated by Square’s RMBUSD exchange rate rather than WeChat’s.

Frank’s connection is to Poloniex, which in thisexample maintains a CENTRE node that supports US
dollar stablecoin tokens and BTC. Charlie’s mobile
wallet supports US dollar stablecoin tokens, but not
BTC. The Poloniex node publishes its exchange rate
between BTC and US dollar tokens (i.e., the current
US dollar value of bitcoin). That rate is displayed toFrank, and if he accepts, the transaction can proceed.

More simply, consider this same-currency
wallet interoperability example:
Charlie has a mobile wallet app which holds
a balance in US dollars. He is in line behind
Carol at Dave’s sandwich shop and when it
is his turn, Charlie uses his mobile wallet to
pay into Dave’s Square point of sale app.

Then, as in earlier examples, token-consuming service
providers may enter the sequence to offer compliance,
fraud, identity, risk, or other services to Frank orCharlie as required by the products they are using.

Even though Charlie and Dave have apps bycompeting companies, these apps can interoperatebecause both support transfers of US dollar tokens.
Using CENTRE, the apps achieve interoperability
and can seamlessly facilitate a payment basedon supporting a common open protocol.

The transaction in this example executes through statechannels so Frank can be sure that Charlie received
the transfer even though it crosses blockchains frombitcoin to US dollar tokens (on the ethereum chain).

2.5 Existing Technology

2.4 Crypto Asset CrossBlockchain Sequence
CENTRE also plans to enable transactions acrossblockchains and crypto assets, and can connect such
crypto assets to fiat-based accounts and wallets.
For example:
Frank holds a bitcoin balance in Ledger, a hardwarebased wallet. If his wallet supports CENTRE, he canopen a state channel with other CENTRE nodes forthe purpose of routing bitcoin-based transactions
and transfers. For example, if the Poloniex crypto

CENTR ECENTRE plans to bootstrap development of its
implementation by utilizing intellectual property
contributions as well as perpetual licensing, as
appropriate, from Circle, where an early form of
these kinds of protocols is in production today.
The protocols, APIs, and business rules defining
interactions between network participants
represent a level of abstraction above any particular
implementation of those rules. Existing web content
protocols illustrate this relationship: HTTP defines a
vocabulary for requesting an HTML page, but does
not require any specific technical implementation,
operating system, or programming language for that|13

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vocabulary. Similarly, the CENTRE protocols define
a vocabulary and business rules but do not requirea specific distributed ledger, language, runtime, or
operating system for implementing those rules.

D OCU MENT VER S ION 2.0

tokens), and state channel contracts as an option
for quickly transfering value on the network.

The initial implementation of the CENTRE protocol
exists at Circle, where it was built over the past several
years and has supported significant transaction
volume in production across multiple fiat and crypto
currencies. CENTRE plans to implement the protocols
on top of Ethereum as a series of smart contracts
and ERC20 tokens. CENTRE plans to leverage theexisting implementation to accelerate developmentof a new implementation of the protocol.

Wallet account providers, financial institutions, software
companies and other participants will begin to join
the network by hosting one or more CENTRE nodes.
A node is intended to provide a
network participant the ability to:• Issue new fiat tokens, such as tokens torepresent US dollars, Euros, RMB, or othercurrency that a node owner can settle;• Configure which fiat tokens to accept, ordelegate the decision to a third party;• Publish rates for exchanging fiat tokens;

2.6 CENTRE Nodes
CENTRE intends to evolve the existing protocol
implementation from Circle into a new software
package that defines a CENTRE “node.” Initially,a node is expected to consist of (1) a collection ofsmart contracts deployed on Ethereum, and (2)code that knows how to interact with Ethereum
and those smart contracts. The smart contracts
include fiat token contracts (implemented as ERC20CENTR E• Configure trust levels as rules dictating which
other node owners and network participants
to trust, or to delegate the decision to athird party such as a payment network;• Exchange metadata about a transaction before
any value is transferred and deny/approvetransactions based on the metadata;• Ensure that value transfers execute atomicallyand quickly through the use of state channels.

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While the initial CENTRE node implementation (unlike
the original Circle implementation of the protocols)
is intended to operate on Ethereum, the use of statechannels allows the network to be implemented on
multiple blockchains and perform atomic transfers
across blockchains. Thus in the future, participants
would not necessarily be limited to Ethereum andnew blockchains could be added to the network.

2.7 Technology Implementation Notes
2.7.1 STABLECOIN DESIGN

Four general approaches exist for a
price-stable token strategy:• Fiat-collateralized: Fiat assets in reserves
collateralize tokens and thus provide price stability
by pegging token value to reserved fiat value;• Crypto-collateralized: Crypto assets in reserves
collateralize tokens and provide price stability
pegged to the value of those reserved crypto assets;• Algorithmic non-collateralized: Software economic
models aim to provide price stability without
relying on underlying collateralized assets;• Hybrid: A blend of the threebasic approaches above.
CENTRE aims to provide the first: a fiat-collateralized
approach. One unit of tokenized fiat currency isbacked by one unit of reserved fiat. More so thanthe other approaches to stablecoin development,
the fiat-collateralized approach requires meetingfirm traditional regulatory requirements, requires
issuing members to have strong auditable reserve
capability for traditional backing assets (suchas fiat banking relationships), and provides lessdecentralization -- and it is also currently the mostrobust approach in terms of price stability.
CENTRE addresses the centralization tradeoff byenvisioning a network of multiple token-issuingmembers, thus providing multiple reserves and

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liquidity sources for network users rather thanpresenting a single collateralization gateway point of
failure. This approach is distributed, though it does not
purport to be -- or aim to be -- entirely decentralized.
Further, CENTRE itself enforces membership
requirements related to audits/solvency, licensing andcompliance, and capitalization thresholds and limits.
This eliminates reliance on any one issuing member
to provide these controls. CENTRE, as a technology
provider and network scheme, provides suchgovernance and is incentivized to maintain complianceand solvency from all its licensed issuing members.
The interaction between a token-issuing member
and the CENTRE network is codified in a seriesof smart contracts created and maintained by
CENTRE, along with a protocol and network policies
to facilitate such interactions. CENTRE does not
maintain fiat asset reserves itself, and CENTRE is a
not a financial institution; likewise, issuing network
members do not control the fiat token contracts,
but rather leverage them as they interact with the
CENTRE network. New issuing members muston-board into the CENTRE network, and new fiat
tokens join the scheme through that process.
The contracts created and maintained by CENTRE
are intended to be open source software,subject to ongoing global peer review as well
as formal security review, and evolved throughinternal CENTRE engineering development
as well as through collaboration with open
source developers around the world.
2.7.2 STATE CHANNEL TRANSACTION
MANAGEMENT

To transfer tokens at higher throughput rates, as
an option in addition to direct usage of Ethereum,
CENTRE transactions can utilize the state channel
pattern. Using this option, nodes exchange balance
information in the form of tokens transferred|

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in state channels. This section describes how
state channels operate at a conceptual level.
State channels are a way for two or more participants
to update shared state between them securely
without executing transactions on a distributed ledger,
except for creating and finalizing the state channelon the ledger. State channels are similar to payment
channels, but state channels can manage multiple
types of shared state in addition to payment data.
To create a state channel, the participants agree
to an initial state and execute transactions on
an underlying distributed ledger in order tolock in that state. Subsequent updates can be
executed without executing any transactions on
the ledger. Each update is simply a new state,
and each participant cryptographically signs the
new state if it is valid. When the participants wish
to close the channel, they can each execute atransaction saying they agree to the final state.

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Thereafter, Alice and Bob can perform updates bycommunicating between themselves: When Alicesends 50 euro tokens to Bob, she does so bygenerating a new state, cryptographically signing it,
and sending it to Bob. If Bob agrees to the new state,
he signs it and sends it back to Alice. The new state
between them looks as follows:

If Bob then sends 25 tokens back to Alice, hegenerates a new state, signs it, sends it back to
Alice, who signs it, producing another new state of:

For example, imagine Alice and Bob wish to createa state channel for payments. They each lock 100
US dollar tokens into a state channel contract
on the ledger, for an initial state as follows:

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When Alice and Bob wish to settle these payments,
they do so by closing the channel. Alice executesa transaction reporting that she agrees to the final
state; Bob agrees, so he also executes a transaction
agreeing to the final state. Since they agreed, thestate channel contract then sends the funds to eachparticipant based on the final state it was given. In
this example, Alice receives 75 euro tokens and Bob
receives 125. The net change of 25 tokens from Aliceto Bob is committed to the ledger. Any intermediate
state changes will never be committed to the ledger.
When one party wishes to close a channel,
the state channel contract does not close
immediately on demand. Instead, a challenge
period commences in which the otherparticipants have a period of time to either:• Agree, in which case the channel is closed andthe changes are committed immediately;• Dispute the final state by submitting a state signedby all parties with a higher sequence number; or• Do nothing, which will constitute agreement
once the challenge period expires.
Imagine the scenario in which Bob wishedto “cheat” by broadcasting the earlier state
which assigned him 150 tokens instead of 125
tokens. That state was also signed by bothBob and Alice, so it is in some sense valid.
In this example, if Alice disagrees with the final statethat Bob submits, then she would have a chance
to submit the later state (sequence 2), which was
also signed by both parties; in this example, thatwould supersede Bob’s final state. Bob could theneither agree or do nothing. He would be unable todispute since he does not have a later state signedby both parties. This means that no participant
can prevent another participant from closing thechannel, and no one should be able to close thechannel except with the legitimate final state.

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Further, the reputational impact of any party
attempting to cheat the network is recorded andsubsequently visible to other participants.
2.7.3 CHAINING STATE CHANNELSState channels can be chained to enable payments
to additional parties. If Alice wishes to pay Carol,and both Alice and Carol have a channel with Bob
but not with each other directly, then the transferfrom Alice to Carol can flow through Bob and thenon to Carol without requiring Alice and Carol toopen a direct channel. To chain state channels inthis manner, the system must enforce assurance
that when Alice pays Bob, that Bob will in turn pay
Carol and that Bob cannot retain the funds himself.
This is accomplished through the use of a hashedtime locked contract (HTLC), which makes executing
the chained payment as secure as executing it
through a normal direct state channel. A chainof states is established in which the funds will be
released if and when the recipient can produce asecret. The final recipient is then given the secret,which they pass up the chain, and everybody inthe chain can use the secret to claim the funds.
In this example, Alice gives Bob a new state thatessentially states: “if you can produce the preimage
that will produce this hash, then you can receive thefunds.” Bob then produces a similar state with Carol.
Alice then gives Carol the preimage. Carol usesthat preimage to retrieve the funds from Bob, andthen Bob uses that to retrieve the funds from Alice.
Since the HTLC is enforced by the state channel, if
one party attempts to steal the funds then the otherparty can broadcast a transaction with the HTLC andthe preimage, which will direct the funds to them.
2.7.4 NODE MODULES

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make replacing or extending parts of a CENTRE nodeas easy as possible. Different network participants
may wish to employ different internal technologies(such as a relational database, key management,
PII storage, etc.), so it is critical that CENTRE has apluggable means of supporting those requirements.

CENTRE Management Module

A preliminary, non-inclusive list ofplanned modules is as follows:

Exchange Rate Module

A module implementing APIs that node owners
employ to control and administer a CENTRE node.
This includes support for initiating a value transfer,
deploying a new token, and updating trust parameters
for nodes and tokens, among other features.
A module to manage what rates a node
offers when trading between assets.

Distributed Ledger and Smart Contract Modules

A module and interface to manage and employ a
distributed ledger and the necessary associated smart
contracts. Initially CENTRE provides a module that
implements a module and interface for Ethereum.
This smart contract module includes: Code that
understands how to talk to an Ethereum node,
smart contracts for tokens and state channels to be
deployed as needed, and code to interact with theincluded smart contracts to enable value transfers.
Routing Modules

Key Management Module

Modules to handle securely storing andretrieving cryptographic keys for signingtransactions and executing state updates.
Identity, Risk, PII, Compliance, Authorization, and Service
Modules

Extensible modules employed for identity andaccount management, KYC/AML compliance,
secure storage, authentication and authorization,risk scoring, and other services.

A module to determine routing
for negotiating transfers.
CENTRE Protocol Module

A module to implement APIs that CENTRE
nodes use to communicate with one another.

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The CENTRE
Team and
Organization

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and a significant R&D function that continues tobuild and improve the CENTRE software protocols.
Software contributors are expected to include
a growing community of third party developersfrom CENTRE network members as well as
independent developers around the world.

While initially a wholly owned subsidiary of Circle,
it is proposed that CENTRE operations and teammembers are to be transferred to the CENTRE
organization, a new entity which is to be createdin the coming months. The CENTRE organization
expects to operate independently, with entirely
separate dedicated working capital, employees
and technology development. Circle expects to
act merely as a founding member and source ofthe original technology and IP, and as a productionuser of CENTRE, as further detailed below.

3.2 Circle Corporate BackgroundAs the creators of the core CENTRE technology andIP, and as the network’s founding member, Circle’s
broader background and leadership is criticalto CENTRE’s launch and initial development.

3.1 The CENTRE Organization

3.2.1 LEADERSHIP, INVESTORS, AND DIRECTORSThe CENTRE organization aims tosatisfy four key objectives:

Circle’s senior management team brings highly
seasoned leaders with decades of success in leading
companies in the Internet technology, online services
and banking industries. Cofounders Jeremy Allaireand Sean Neville have built multiple global publiccompanies with products and platforms that havehelped to transform software development, webcontent, online media, and core Internet infrastructure.

• Provide R&D capability, support and maintenanceof the CENTRE open source software project. This
includes managing the open source code repository
and facilitating and supporting third party developer
engagement, evangelism and code contributions.
• Provide the business development, governanceand compliance functions for the CENTRE Network,
including business development required to usher
new nodes into the network for consumer wallets,
merchants, payment acquirers, and others.

Sean and Jeremy are joined by seasoned executives
and a broad leadership team coming from companies
including Goldman Sachs, Amazon, Square, Google,
AirBnB, Expedia, eBay and Adobe, among others.
A unique combination of top Internet technologists
and operators familiar with the complexities andrisks of global finance, the management teamrepresents one of the most experienced and talented
firms in the global Internet Finance industry.

• Provide optional certification testing, trust authority
services, compliance reviews, and due diligenceprograms to allow node owners to opt into proving,
maintaining, and broadcasting high degrees of trust
to satisfy legal obligations and to increase reputationand presence among other network participants.

Circle is backed by by leading venture andstrategic investors including IDG Capital, one of
the largest venture capital firms in China and early
investor in Tencent, Baidu and CreditEase; Breyer
Capital, founded by Jim Breyer, one of the leading
VCs in the world and first investor in Facebook;
General Catalyst Partners, major investors in Snap,
Airbnb, Stripe, and Kayak. Strategic investors• Contribute engineering and support services to theunderlying distributed ledger infrastructure (suchas Ethereum) on top of which CENTRE operates.
This vision sees CENTRE growing to become asignificant global organization with business andoperational professionals in all major markets aroundthe world, a global compliance function that isworking closely with digital wallets in every region,

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include Goldman Sachs, CICC Alpha, Baidu,
WanXiang, CreditEase and EverBright Bank.
Circle’s board of directors includes, in addition to
Jeremy and Sean, veteran venture investors Jim
Breyer, Quan Zhou and David Orfao, who have helped
to build some of the most significant consumer,
Internet, and technology companies in the UnitedStates and China. Independent Director Raj Datebrings decades of experience in consumer financeas a senior executive at Capital One and DeutscheBank, and he was recruited by US Secretary of theTreasury Timothy Geithner and Senator Elizabeth
Warren to spearhead a new regulatory agency for
consumer financial protection. Independent Director
M. Michele Burns is a leading global financial
executive who was CFO of Delta Airlines, Mercer
and Marsh McClennan, and has served on the boardof directors of Walmart, Cisco, Goldman Sachs(where she chairs the risk committee) and Inbev.
Independent director Alex Norstrom is a Spotify
executive who oversees the Spotify subscription
business unit and brings a strong background ingrowth and marketing in the consumer internet space.

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Circle Pay is a global social payment app that enables
customers to make payments instantly and without
fees, including instant payments that cross currencies
and borders. Circle Pay combines open, crosscurrency transactions with delightful social messaging
behaviors -- conversations, media and payments.
Circle Pay was built from the ground up on
blockchain technology and specifically on thetechnology behind CENTRE. The company
envisions money and value transcending walled
gardens to become more inclusive and globespanning, nearly instant, secure, and enabling new
forms of growth and innovation for businesses
and individuals. Charging a toll for payments will
disappear, opening up enormous opportunities for
global value exchange, including bringing several
billion people into the global digital economy.
Circle Trade operates the company’s crypto asset
trading business, which today is one of the largest
market makers and OTC liquidity providers in
the world. Circle Trade directly trades over $2B
per month in the marketplace, provides dailyliquidity to large natural buyers and sellers ofcrypto, trades at high values (minimum of $500k
USD), and acts as a liquidity provider and market
maker on all mature crypto asset exchanges.
Circle Invest, first released in the US in spring of
2018, is a mobile app that surfaces Circle Trade’s
capabilities to retail consumers. Circle Invest simplifies
crypto asset investment particularly for those new
to the space. Circle Invest has zero commission
fees, instant funds access, and a minimum of $1
USD. Circle Invest will grow its features and expand
global market availability over the course of 2018.

3.2.2 CIRCLE PRODUCTS AS CATALYSTS FOR
CENTRE ADOPTIONWith billions of dollars in transaction volume,
millions of customers, and a growing global
footprint, Circle’s products can be major catalysts
for broader CENTRE Network adoption.

Poloniex is one of the world’s largest crypto asset
exchanges. Circle envisions Poloniex evolving into
a robust multi-sided distributed marketplace that
can host tokens which represent everything ofvalue: physical goods, fundraising and equity, realestate, creative productions such as works of art,

Circle currently operates four major product lines:
Circle Pay, Circle Trade, Circle Invest, and Poloniex.

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music and literature, service leases and time-based
rentals, credit, futures, and more. Circle believes
that the contractual rules around exchange foranything and everything will become increasingly
represented in distributed global software, rely on
inconvertible distributed shared memory in theform of distributed ledgers, and benefit from theservices of global multidimensional marketplaces.

building seamless consumer payment experiences
and using fiat currency on top of underlying
blockchain settlement and integration layers arecore to CENTRE. Other technology innovations
include systems and services for layering KYC andAML risk decisions into payment networks andtransactions, and systems for providing instant liquidity
and conversion between fiat and crypto assets.

3.2.3 REGULATORY AND LICENSING PORTFOLIO

3.3 Organizational Structure and Advisors

The advent of cryptocurrency and blockchain
technology represents the most significant
technology breakthrough since the emergence ofthe commercial internet, and Circle has believed
it is crucial to build strong relationships withgovernments who are seeking to understand thetechnology and ensure that markets can adopt
it while also addressing key risks to society, theeconomy, and consumers. Because of this, Circle has
focused on deep and high-quality engagement withregulators since its inception, and holds the broadest
licensing of any crypto company in the world.

The CENTRE organization will be seeded withseveral key Circle employees who anticipate
moving from Circle into CENTRE. This talent
includes individuals in engineering, operations,business development, finance, and compliance.
The CENTRE organization will be supported bya strong board of advisors with deep experience
in internet platforms, protocols and consumer
products, enterprise development, open
source software, and also deep expertise incryptocurrency and blockchain technology.

Circle is a registered Money Services Business (MSB)
with the Financial Crimes Enforcement Network(FinCEN) of the US Treasury Department and holds
money transmission (or equivalent) licenses in
48 US states and territories. Circle is the first andcurrently one of only four companies to have been
granted a BitLicense from New York. Circle also
holds an E-Money Issuer license from the Financial
Conduct Authority in the UK. These licenses
enable the company to offer fiat and crypto asset
storage, currency exchange, and payment services
in the United States, UK, and European Union.

4.0 The CENTRE
Organization
The CENTRE working group expects to update thispaper periodically during the course of technicalpeer review, legal and compliance review, financeand tax counsel, and during ongoing engineering
progress.

3.2.4 TECHNOLOGY AND IP CONTRIBUTIONS

Major updates are expected to be reported
on the CENTRE web site: http://centre.io.

Circle is contributing core technology and IP to
the CENTRE organization. This IP is the result of
several years of technology development at Circle
to support the consumer social payments and crypto
asset trading businesses. Circle’s pioneering work in
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5.0 Glossary

Ethereum: An open source, public, blockchainbased distributed computing platform featuringsmart contract scripting functionality.

Anti-Money Laundering rules (AML): A set ofprocedures, laws or regulations designed to stop thepractice of generating income through illegal actions.

Hashed TimeLock Contract (HTLC): A class of
smart contracts that require that the receiverof a payment either acknowledge receiving
the payment prior to a deadline by generating
cryptographic proof of payment or forfeit the ability
to claim the payment, returning it to the payer.

Application Programming Interface (API): A set ofroutines, protocols, and tools for building software
applications. An API specifies how software
components should interact. In general terms, it isa set of clearly defined methods of communication
between various software components.

IOU: A cryptographically-signed pieceof data acknowledging a debt.
Implementation: A specific realization of a protocol
or other software abstraction in the form of one
particular incarnation in particular software code.
Loosely speaking, a blueprint is to a house as aprotocol specification is to an implementation.

Bitcoin: A network in which encryption techniques
are used to regulate the generation of unitsof currency and verify the transfer of funds(when lowercase, the term also refers to theunits of currency rather than the network).

Know Your Customer (KYC): Rules and processes
in which a business identifies and verifies theidentity of its clients. The term is also used torefer to the bank and anti-money laundering
regulations which govern these activities.

CENTRE: A protocol for digital wallet interoperability
across currencies and borders, across diverse
software implementations, and across multiple
blockchains, ledgers, and settlement rails.

Node: A software package which operates
and manages network participation, including
providing protocol and API implementations,on behalf of a network participant.

CENTRE Network: The connected network of CENTRE
nodes operated by participants such as wallet
providers, service providers, and financial institutions.
Chained State Channels: A mechanism for allowing
two state channels that are not connected directly
to one another to connect securely indirectly using
intermediary connections to other state channels.

Payment Channel: Specific to Bitcoin, a Micropayment
Channel or Payment Channel is a class oftechniques designed to allow multiple transactions
without committing all of those transactions tothe blockchain. In a typical payment channel, only
two transactions are added to the blockchain
but an unlimited or nearly unlimited number ofpayments can be made between the participants.
Payment Channels are a class of State Channels.

Circle: Circle Internet Financial is the company
which created the initial implementation of the
protocol, and which will help bootstrap CENTRE
development with IP contributions and licensing.
Crypto Asset: A cryptographic unit of data andsoftware code which has value as a tradeable asset.

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Protocol: A set of rules and guidelines forcommunication. Rules are defined for each stepand process during communication between two
or more nodes, and nodes must follow these rules
to transmit data successfully. A single protocol may
be realized in diverse implementations in varying
programming languages and runtimes acrossdiverse blockchains or other infrastructure.

Stablecoin: A term used to describe a crypto
asset that is pegged to underlying reserved
assets and/or managed by software algorithms
in order to enforce price stability.
State Channel: A discussion channel between
network participants capable of updatinginternal data (state) without requiring that every
such data change be printed to an underlying
blockchain. A superclass of Payment Channels.

Service Provider: A CENTRE network participantthat provides services to the network to support
financial transactions. In exchange for fees paid intokens, service providers may offer compliance,
KYC, identity, data storage, fraud detection, or otherservices of interest to other network participants.

Token: A smart contract that is employed to gain
access to and use of the network, and which
identifies the holder as a network participant,and which implicitly accrues value in proportion
to the usefulness of the network it unlocks.

Settlement: Delivery of an obligation insatisfaction of an IOU which may have beentransacted between network members.

Transaction: In CENTRE, a transaction is a transfer
of an IOU from one network participant to another.
Trust Level: A numeric indicator of a network
participant’s trust and certification level which
is determined by that participant’s licensing
profile as well as its behavior over time.

Smart Contract: Computer protocols intended
to facilitate, verify, or enforce the negotiationor performance of an agreement.

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