USDC Stablecoin Issuer Circle Plans an IPO
It’s that time again. Circle Internet Financial (Circle) announced on Thursday that it has confidentially filed for an IPO. But what sets this IPO apart? Let’s take a closer look.
Circle is known as the issuer of the stablecoin USDC. According to CoinMarketCap, USDC has a market capitalization of around $25.25 billion, making it the second-largest stablecoin on the market. The largest stablecoin, Tether, has a market cap of $94.65 billion as of the time of publication.
The company has not yet disclosed the number of shares or the price range for the proposed IPO. And it’s no surprise that Circle has not responded to questions about how this IPO differs from its previous SPAC (special purpose acquisition company) efforts.
Confidential Filings and the JOBS Act
Private filings for public offerings were made possible by the JOBS Act of 2012, which allows companies with less than $1 billion in revenue to get their paperwork started without immediately disclosing numbers to the general public.
This is not Circle’s first attempt to go public. In July 2021, the company planned to list on public markets through a SPAC merger with Concord Acquisition Corp. At the time, SPACs were all the rage, and Circle seemed like a promising candidate for a blank-check merger. This would have allowed the company to raise capital with a less established business model.
Later on, in February 2022, Circle decided to double its SPAC value. We took note of this repricing, which was based on a significant increase in the amount of USDC in circulation.
At the same time, the United States’ central bank began to raise interest rates. This had a ripple effect on the world economy and, of course, on the value of cryptocurrency assets. While the market as a whole struggled with the higher cost of capital, fintech companies, in particular, benefitted from increased interest-derived revenues. This was due to their holdings of cash and cash-like investments on their books.
