Circle Set to Go Public on NYSE as Crypto Gains Popularity on Wall Street
Circle, a leading fintech firm well-known among the digital asset community for its regulated stablecoin USDC, is set to go public in a deal that values it at $4.5 billion. The company announced today, July 8, that it has entered into a definitive business combination agreement—a merger agreement—with Concord Acquisition Corp.
Previously, around mid-April, the leading crypto exchange Coinbase went public on Nasdaq. Now, with Circle going public on NYSE, the route for a more diverse swarm of investors to dabble into crypto-related entities will be paved.
Circle to Go Public in SPAC Deal
Circle will go public via special purpose acquisition company (SPAC) “Concord Acquisition Corp” (NYSE: CND). A SPAC is a shell corporation listed on a stock exchange whose sole purpose is to acquire a private company and make it public without going through the traditional initial public offering process.
The deal, which values Circle at $4.5 billion, is expected to result in gross proceeds of up to $691 million. Further, last month, Circle managed to raise $440 million in funding from its major supporters.
Once the merger deal is sealed, Circle will be listed on the New York Stock Exchange under the symbol “CRCL.” This marks a watershed moment for the crypto industry as Circle will be the first crypto-related firm to find its way to NYSE. Consequently, a new category of investors will be able to fund, and own a piece of, public companies in the digital asset space.
Circle is Behind More Than Just USDC
Founded in 2013, Circle is a financial services company that utilizes blockchain technology for its peer-to-peer payments and crypto-related products. The company has been quite favorable among Wall Street, as it was previously backed by the leading global investment bank Goldman Sachs.
Circle commenced as a peer-to-peer cryptocurrency payment and exchange platform. The company previously backed Poloniex exchange, a popular cryptocurrency exchange that spun out from Circle in October 2019.
Inside the crypto community, Circle is popular for its regulated stablecoin USDC. In 2018, in partnership with Coinbase, Circle launched USD Coin (USDC), a stablecoin pegged to the US dollar. Later in 2019, the company abolished Circle Pay mobile and related web apps, and has since been focused on its stablecoin as “programmable dollars” for business use.
The Role of USDC as ‘Programmable’ USD
USD Coin (USDC) is the second-largest stablecoin in terms of market capitalization with more than $25 billion in circulating supply. In its essence, USDC is pegged to the US dollar in a 1:1 ratio, meaning that one USDC represents one US Dollar on the Ethereum blockchain.
Stablecoins have become the backbone of crypto markets mainly due to their stable price and seamless integration with crypto products. Stablecoins also have a near-instantaneous transaction settlement, which makes them a more suitable crypto asset for daily use.
Among all stablecoins, USD Coin (USDC) has cemented its position in the global crypto capital markets as the go-to for traders who prefer to precisely comply with regulations. USDC is also popular for its transparency, it is issued by Circle and is audited monthly by accounting services firm Grant Thornton LLP.
Moreover, users can deposit USDC on numerous DeFi protocols and earn a yield. USDC also has top lending rates on sites like BlockFi, Compound, and dYdX.
In addition, USDC can be used in a variety of financial applications and services outside of the crypto industry. In other terms, USDC is similar to a global dollar, allowing the exchange of value between people, businesses, and smart contracts.
2021 as FinTech’s Year to Go Public
Circle is not alone in its move to go public as various other fintech firms are also planning to do so. Four months ago, the trading platform and eToro announced that it will go public via SPAC with FinTech Acquisition Corp V in an extensive $10.4 billion deal.
Moreover, the infamous trading brokerage Robinhood Markets Inc. also plans to go public via an initial public offering (IPO). In an unprecedented move, the company unveiled that it will give amateur investors access to initial public offering shares. Historically, IPO shares have been set aside for Wall Street’s institutional investors or high-net-worth individuals.
Despite this, many individual investors are shunning the stock market debut and even encouraging others to avoid and not buy into the IPO. In such a situation, it remains to be seen if Robinhood can raise a satisfactory amount of money, and if individual investors buy into its IPO or avoid it.
Note: Since this article was published, eToro has subsequently delayed its plans to go public via SPAC.
Do you think Circle is following suit with Coinbase going public? Will more crypto-related firms start to go public? Let us know in the comments below.