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  • J Huang and S Pettigrove

Full Circle: USDC issuer files for IPO

Almost 2 years ago, the so-called "algorithmic stablecoin" Terra and its sister coin Luna dramatically collapsed - setting the stage for a prolonged crypto-winter. Yesterday Circle Internet Financial, the issuer of the world's second-largest stablecoin, USDC, filed for an initial public offering (IPO) in the United States.

In a press release, Circle announced that had filed a confidential draft registration statement with the Securities and Exchange Commission (SEC), the US securities watchdog, relating to the proposed IPO of its equity shares. The number of shares to be offered and the price range for the proposed offering have not yet been determined. An IPO will only take place after the SEC completes its review process, and is subject to market conditions.

CoinMarketCap data shows that USDC, Circle's popular US dollar-backed stablecoin, currently has a market cap of about $25 billion, second to Tether, the largest fiat-backed stablecoin which has a market cap of around $95 billion.

Previously, Circle planned to go public via a special purpose acquisition company (i.e. SPAC) deal in 2021, with a February 2022 valuation reported at $9 billion. However, Circle CEO Jeremy Allaire said that the deal fell through after his firm didn't complete the SEC's "qualification in time."

Despite laying off staff last year during the prolonged crypto bear market spurred by the collapse of Luna/Terra, FTX and others, Circle's new IPO plan reflects renewed market interest in the company, with higher interest rates contributing to increased yields on its cash and Treasury holdings, and mainstream stock markets hitting new highs.

Circle's USDC stablecoin also survived a significant de-peg event last year, with one of its key banking partners, Silicon Valley Bank, experiencing a sustained bank run that resulted in it being seized by regulators.

Circle's plans follow the SEC's approval of the first Bitcoin spot ETFs this week, a watershed moment that cryptocurrency advocates believe will draw new institutional and retail investors into the growing market.

By going public, Circle would join Coinbase, one of the world's largest cryptocurrency exchanges, as one of the few publicly traded crypto companies.

Written by S Pettigrove and J Huang


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