In the shifting landscape of the global stablecoin market, a variety of centralized and decentralized providers jostle for position, each one offering users a different vision for fiat-pegged digital currency.
Among those stablecoins that are backed by fiat collateral, most are issued by corporations – centralized entities that generate a profit from their customers’ deposits. Yet, even though such firms control an increasingly critical part of the world’s financial infrastructure, only a few are publicly traded. But that could change soon.
Thanks to the backing of major institutional players including Goldman Sachs, BlackRock, and Fidelity, since its founding in 2013, Circle has emerged as one of the world’s most successful stablecoin businesses.
Having raised over a billion dollars over 12 funding rounds, in 2022, the USDC issuer looked like it was finally on course for an initial public offering (IPO). But following multiple crypto market crises throughout the year, in December, the deal fell flat, scuppering Circle’s plans.
Eleven months later, with bullish market sentiment indicating the end of crypto winter, Circle’s IPO has once again become a hot topic, with reports indicating that a 2024 listing could be on the cards.
As CEO Jeremy Allaire explained after the previous plan to float on the New York Stock Exchange fell through, “becoming a public company remains part of Circle’s core strategy to enhance trust and transparency.”
But if Allaire’s conviction that an IPO will deliver greater transparency is true, shouldn’t other issuers also consider going public? For Circle’s closest peers in the dollar-pegged stablecoin market, there appears to be little appetite for such an outcome.
Discussing a potential Tether IPO, in a 2022 interview, CTO Paulo Ardoino (who has since been promoted to CEO) dismissed the idea out of hand.
In contrast with Allaire’s position that listing publicly would be a positive outcome for end-users, Ardoino suggested that the influence of Wall Street would be detrimental to its customer base. “I’m proud that Tether is not planning to go public. We want to keep doing what we are doing and keep helping our audience,” he said.
Like Circle and Tether, Paxos’ growth has been funded by an eclectic mix of investors that includes a string of venture capital firms, PayPal, Alameda Research and the South American e-commerce giant Mercado Libre.
However, the company has never expressed any interest in listing publicly.
In fact, considering that Paxos counts some of its biggest clients among existing stakeholders, there are advantages to maintaining the status quo. Unlike public companies, which must be accountable to a diverse range of interests, Paxos’ small circle of investors share many of the same goals.
Of course, further down the line, an IPO may prove to be the most profitable route. But for now, at least, Paxos appears to focus on other things.