Circle Internet Financial files for initial public offering to expand Stable Coin business

Circle Internet Financial, the issuer of the USD Coin Stable coin, announced plans to go public through an initial public offering (IPO), filing a confidential S-1 registration form with the United States Securities and Exchange Commission (SEC). The long-awaited move could allow one of the largest cryptocurrency companies to list on a major stock exchange and make its shares available to retail and institutional investors.

Formation of Foundation

Founded in 2013, Circle focuses on building core infrastructure for open financial services and payments. Led by cryptocurrency pioneer Jeremy Allaire as CEO, the Boston-based firm created USD Coin (USDC) in collaboration with Coinbase in 2018. USDC was designed as an alternative to other Stablecoins that maintain a steady exchange rate to the U.S. dollar through reserve backing.

Holding reserves in cash and short-term U.S. Treasury bonds gives USDC very low volatility compared to other cryptocurrencies. This stability has gained widespread adoption among exchanges, brokers, and other institutions for transferring value between cryptocurrency and fiat currency markets. USDC now has a market capitalization of over $25 billion, making it the second-largest Stablecoin by value in circulation.

Road to Going Public

Circle’s move to the public markets through an equity listing represents the culmination of prior efforts to list on exchange-traded platforms. In mid-2021, an agreement was reached for Circle to merge with special purpose acquisition company (SPAC) Concord Acquisition Corp., which would have valued the combined firm at around $9 billion. However, challenges securing approval from SEC regulators caused the complex deal to fall through in late 2022.

More recently, in April 2022, Circle raised $400 million in a venture capital funding round led by major institutions, including Fidelity and BlackRock. This capital injection enabled further development of Circle’s core product offerings and set the stage for the current filing. Details regarding the timing, share price, and size of the proposed IPO offering have yet to be disclosed, pending SEC review and market receptiveness.

Industry Tailwinds Favor Public Listing

This action is taken in the context of increasing excitement for investments related to cryptocurrency on public trading platforms. In the past year, a wave of crypto stocks like Coinbase, MicroStrategy, and Marathon Digital have generated triple-digit percentage gains despite industry downturns. Regulatory progress, including approval of bitcoin exchange-traded funds, could draw new money from pension funds and other large institutional players.

If Circle’s equity fundraising is successful, it will allow regular investors to have a stake in one of the leading infrastructure providers supporting the expanding digital asset industry. With its proven digital dollar product, deep experience, and strong partners, Circle appears well-positioned to take advantage of the ongoing evolution. Completing the IPO process would represent a watershed moment for the cryptocurrency industry’s integration with traditional capital markets.