Circle Internet Financial, the issuer of USDC stablecoin, has officially filed for an Initial Public Offering. The global fintech company recently submitted a confidential draft S-1 to the U.S. Securities and Exchange Commission.
USDC, recognized for stability and reliability, ranks as the second-largest stablecoin. The company boasts a market capitalization of around $25 billion. Tether, its primary competitor, claims the top spot with a market cap nearing $95 billion.
The growth of stablecoins, exemplified by USDC, underscores their pivotal role in the digital asset ecosystem. The growth further bridges traditional finance and the burgeoning world of cryptocurrencies.
An IPO will open a company’s inaugural sale of stock to the public. Before an IPO, a company remains private, typically with a limited number of investors. After attaining one, a company shifts from private to public ownership, enabling the general public to purchase shares and acquire a stake in the company.
The move aligns with regulatory developments and current market challenges. Following Coinbase’s successful entry, Circle sets a precedent for crypto entities eyeing public listings, marking a significant milestone in merging crypto with traditional financial markets.
Aspiration aligns with SEC
Circle’s aspiration for an IPO aligns with the SEC’s recent approval of spot Bitcoin ETFs earlier this week. The growing acceptance of cryptocurrencies in the mainstream financial sector aligns with the decision.
Moreover, the approval has unleashed a wave of interest among traditional providers, with numerous asset management firms eagerly anticipating approval to introduce their own Bitcoin spot ETFs. This development aims to streamline cryptocurrency investment processes, enhancing accessibility for a broader investor base.
The IPO process, usually facilitated by investment banks, includes managing securities issuance and listing shares on stock exchanges. Attaining one for Circle is set to legitimize the crypto industry for investors even more.
The timing of Circle’s public offering is also contingent on the SEC’s review process and prevailing market conditions. The IPO filing underscores the Boston-based fintech’s confidence in the resilience and potential of the digital currency market despite recent industry challenges.
Second attempt after 2021 failure
Previously, in 2021, Circle wanted to go public through a special purpose acquisition company (SPAC) deal, which valued the company at $9 billion in February 2022. However, the plan fell through, with CEO Jeremy Allaire attributing the failure to meet the SEC’s qualification requirements on time.
“While disappointing that we did not complete SEC qualification in time, we remain focused on building a long-term public company,” Allaire wrote on Twitter after the case. “From my perspective, I believe that the SEC has been rigorous and thorough in understanding our business and many novel aspects of this industry.”
Circle faced many obstacles on its path, including a workforce reduction in response to a bear market triggered by the collapse of major industry players. These challenges, including FTX, Celsius and Three Arrows Capital, tested resilience within the sector, including Circle.
The broader context of the company’s IPO is notable, as it mirrors the precedent set by Coinbase, a major player in the crypto space. Coinbase’s successful public market entry in April 2021, with a Nasdaq listing valuing the company at $85.8 billion, could guide Circle’s journey. It makes way for the potential for crypto-focused companies in public markets.