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USDC issuer Circle delays IPO amid US stablecoin scrutiny

By Kevin Donovan

16:30, 18 February 2022

Circle USD Coin stablecoin
Acquisition deadline pushed back for reasons outside of the parties’ control – Photo: Shutterstock

The planned SPAC acquisition of the issuer of the USD Coin (USDC) by Concord Acquisition has been doubled in value to $9bn (£6.6bn) and delayed, as the market capitalisation of the target, Circle International Financial, tops $50bn (£37bn), the company said in a press release. Circle's USD coin cryptocurrency token is pegged to the US dollar.

Concord scrapped the previous $4.5bn merger agreement reached last July and announced a new deal that is now expected to list by January 2023.

Regulation looming

The change comes as stablecoins, as well as all cryptocurrency digital assets, currently face increased scrutiny from US lawmakers. President Joe Biden is expected to issue an executive order next week ordering federal agencies to study potential cryptocurrency regulations, including the question of a Federal Reserve-issued stablecoin.

Additionally, a bill was introduced last month blocking any Fed stablecoin issuance, allowing instead for private cryptocurrency stablecoins to exist.

“Circle’s rapid growth and world-class leadership are underscored by a regulatory-first mindset fixed on building trust and transparency in global markets,” added Concord sponsor Atlas Merchant Capital CEO Bob Diamond said in the press release.

USDC Market Cap topped $50bnUSDC Market Cap topped $50bn - Photo: Circle Internet Financial

Extended deadline

The acquisition closing deadline, initially 3 April, is now 8 December with the ability to extend to 31 January 2023, the company reported in an 8-K filing with the US Securities & Exchange Commission.

The acquisition deadline was pushed back “for a variety of reasons outside of the parties’ control,” Concord Acquisition added.

Shares of New York, New York-based blank-cheque firm Concord Acquisition are trading around $10.08 per share, down 25.2% from the $13.48 52-week high share price set last November as cryptocurrencies reached record prices. Concord stock trades over the New York Stock Exchange (NYSE) under the ticker “CND”.

Circle has applied to list its shares on the NYSE under the ticker "CRCL".

XRP/USD

0.53 Price
+0.260% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.01168

BTC/USD

67,338.85 Price
+0.540% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 106.00

ETH/USD

3,143.12 Price
+1.690% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 6.00

DOGE/USD

0.16 Price
+0.860% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.0012872

Transaction participants

"Being a public company will further strengthen trust and confidence in Circle and is a critical milestone as we continue our mission to build a more inclusive financial ecosystem,” said Circle CEO Jeremy Allaire in a statement. “Making this journey with Concord under our new agreement is a strategic accelerator."

Goldman Sachs is acting as financial advisor for Concord, with Greenberg Traurig as legal advisor. Citigroup is acting as capital markets advisor for Circle.

Investors in the transaction’s capital commitments include Adage Capital Management, Cathie Wood's ARK Investment Management, Fidelity and Marshall Wace.  

Concord Acquisition Corp. (NYSE: CND) since 08/07/2021 merger announcementConcord Acquisition Corp. (NYSE: CND) since 08/07/2021 merger announcement - Photo: Koyfin

Rising USD Coin circulation

CoinMarketCap.com shows USDC has a market capitalisation of $52.5bn.

Boston, Massachusetts-based Circle cited the doubling of USDC circulation as the reason for the new $9bn deal valuation. “The increase in value reflects improvements in Circle’s financial outlook and competitive position,” the coin issuer said. “USDC’s circulation has more than doubled since the original deal was announced.”

Circle’s USD Coin Ethereum-based stablecoin is pegged 1:1 to the US Dollar and thus currently trades at $1, according to data maintained by CoinDesk. USD Coin’s market capitalisation topped $52bn this week after reaching $40bn last December.

USD Coin statistics:

  • Over 100 billion USDC issued with over 50 billion in circulation (as of 31 January 2022)
  • 10,000% growth over two years
  • Nearly $2.5 trn in on-blockchain payments and settlements in 2021, and 4.6 million active wallet addresses with USDC transactions in 2021
  • Currently available on eight blockchains
  • More than 200 blockchain protocols supporting USDC
  • 34 leading exchanges available in 180+ countries supporting trading and converting USDC, providing liquidity and convertibility to key currency markets around the world
  • 223 digital wallets available to users in over 175 countries supporting USDC transactions according to combined data from Apple and Google Play Stores

Source: Circle Internet Financial

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You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
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