US-based payments app Circle has raised $60m (£40m) from Chinese investors and launched a Chinese business as it seeks to expand its Bitcoin-based international money transfer service into the worlds second-largest economy.

The latest funding comes from existing investor IDG Capital Partners, a tech investment fund based in Beijing, along with a number of new Chinese investors including Baidu, CICC Alpha and Everbright Investments.

“Were not aiming to compete with the domestic market as that would be a suicide mission given the strength of local players like Alipay and WeChat, but we can connect Chinese consumers with the Euro zone and dollar markets,” said Jeremy Allaire, co-founder of Circle.

Circles China unit will operate as a separate, locally-incorporated company and as such has not yet launched any products, pending a deal with a local banking partner and legal license required to operate.

Circles app enables users to send payments internationally, transferring money into bitcoin and then back into the currency of the destination country, all settled within minutes via a blockchain network that validates bitcoin transactions. According to the company, over $1bn a year is transferred using the service.

The companys aim in expanding to China is to introduce consumers there to a new global method of making small, social payments to peers in other countries at currency rates it claims are better than other money transfer services, due to the use of Bitcoin.

China has traditionally show wariness in embracing Bitcoin, having blocked banks from trading the currency in late 2013 over concerns that it was being used for money laundering. The Peoples Bank of China announced in January that it planned to launch its own digital currencies, cutting the costs of circulating traditional paper money and providing policymakers with more control over the money supply.

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