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Circle IPO 2024? A Potential Game-Changer for the USDC Stablecoin Ecosystem

Last Updated November 8, 2023 10:18 AM
Teuta Franjkovic
Last Updated November 8, 2023 10:18 AM

Key Takeaways

  • USDC issuer Circle is exploring a 2024 IPO, but it’s still in the preliminary phase.
  • Latest Circle’s valuation stood at $9 billion, but USDC’s market cap dropped by 56% since then.
  • USDC experienced a temporary depegging from the USD due to its exposure to Silicon Valley Bank.

In the aftermath of terminating its agreement  to go public through a merger with Concord Acquisition, Circle Internet Financial Ltd. has secured investments from key players like Goldman Sachs, BlackRock, and Fidelity Management.

The USDC stablecoin’s issuer is now reportedly thinking about going public  early in 2024.

Seeking IPO Advisors Amidst $9B Valuation

As it gets ready for a possible IPO, the company is reportedly  speaking with advisors. According to the sources, discussions are continuing, and Circle’s decision to move forward with a listing is not guaranteed. Although it’s unclear how much Circle might ask for in an IPO, the company was valued at $9 billion  when it attempted to go public in a 2022 blank-check offering.

“Becoming a U.S.-listed public company has long been part of Circle’s strategic aspirations. We don’t comment on rumors,” a Circle’s spokesperson commented .

As already mentioned, in December last year, Circle terminated an agreement to merge with Concord Acquisition Corp., a blank-check company run by former CEO of Barclays Plc, Bob Diamond, in order to go public.

Goldman Sachs And BlackRock Invest $400M

Goldman Sachs Group Inc., General Catalyst Partners, BlackRock Inc., Fidelity Management and Research LLC, and Marshall Wace LLP are among the investors who have contributed around $400 million  to Circle.

Circle is renowned for its issuance of one of the world’s largest stablecoins, namely the USDC (USD Coin). Stablecoins, such as USDC, are cryptocurrency tokens tied to an asset like the dollar, and they primarily serve the purpose of facilitating the transfer of digital assets between various cryptocurrency exchanges, often favored by traders.

When Circle disclosed earlier this year that it was exposed to the defunct Silicon Valley Bank for $3.3 billion, USD Coin experienced a temporary depeg. It has recruited Deloitte as an auditor and intends to share financial information on a regular basis.

Coinbase further solidified its partnership with Circle earlier this year, acquiring an ownership interest in the company. This collaboration involves the joint sharing of revenue generated from the interest income on USDC reserves. Coinbase’s recent earnings report  revealed that this partnership contributed $172 million in income.

US House Committee Progressing On Stablecoin Regulation

Recently, the U.S. House Financial Services Committee has moved forward with a bill aimed at creating a national regulatory structure for stablecoins, a category of cryptocurrencies typically tied to conventional assets like the U.S. dollar.

This legislation would task the U.S. Federal Reserve with setting guidelines for the issuance of stablecoins while also upholding the regulatory authority of state bodies. The bill underwent revisions to address apprehensions raised by certain Democrats, who were concerned that stablecoin issuers might sidestep more rigorous oversight by choosing state-level regulation.

Additionally, the Bank of England (BoE) put forth its stablecoin policies earlier.

With a market capitalization of $24.43 billion, Circle’s USDC stablecoin is currently the sixth-largest cryptocurrency. Because of its widespread adoption and success in the stablecoin market, this cryptocurrency has a huge market capitalization.

Tether (USDT), a well-known stablecoin, has a value of $86 billion.  The USDT dominated the stablecoin market, which had a 21% increase in market capitalization last year.

Even while these advancements go on, the cryptocurrency space—which includes Bitcoin—is evolving quickly and drawing in new investors. For this reason, both organizations and individuals find this industry to be interesting and demanding.

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