Circle Internet Financial, the company behind the second-largest stablecoin USDC, is making significant strides towards its long-anticipated initial public offering (IPO). By hiring JPMorgan Chase and Citi as financial underwriters, Circle is expected to publicly file IPO paperwork by the end of April, targeting a valuation between $4 billion and $5 billion.
This marks Circle’s second foray into the public markets. The fintech firm initially announced plans to go public in 2021 via a merger with a special purpose acquisition company (SPAC). However, the US Securities and Exchange Commission (SEC) did not approve the proposed merger, leading to multiple delays and ultimately, Circle’s decision to abandon the SPAC approach by the end of 2022 due to regulatory complexities and a declining crypto market.
In late 2023, Circle made a confidential filing with the SEC for a traditional IPO, a process that is now gaining momentum towards public disclosure. If successful, this IPO could become the largest cryptocurrency-related IPO since Coinbase went public in 2021 through a direct listing.
The upcoming public filing will be a pivotal moment for Circle, providing detailed insights into the company’s financial stability for the first time. This disclosure will not only outline Circle’s financial health but will also reveal the potential ticker symbol for its shares. The company has undergone various transformations over the years, moving its focus from crypto trading and payments to primarily managing stablecoins.
The USD Coin (USDC) has seen a remarkable rollercoaster journey over the past few years. Its market capitalization soared from under $1 billion in 2020 to over $50 billion during the crypto boom of 2021, heavily supported by dollar-backed assets, including US Treasuries. However, the ecosystem faced significant setbacks, notably when $3.3 billion was trapped in Silicon Valley Bank in March 2023, resulting in USDC briefly losing its peg to the dollar.
Despite these challenges, USDC’s market cap hit a low of under $25 billion but has since regained strength, reaching approximately $60 billion. In comparison, Tether’s USDT currently leads the stablecoin market with a market cap of $143 billion.
The advancement of stablecoin legislation in Congress could serve as a bullish indicator for Circle’s IPO endeavors. Just recently, the Senate Banking Committee moved forward with new regulations, while the House is expected to vote on a corresponding bill soon. With a supportive regulatory environment nearing, President Donald Trump has also expressed a desire to sign stablecoin legislation by August, adding to optimism for the industry’s future.
As Circle prepares for its IPO, the focus on regulatory support combined with a recovering market could position the company favorably for a successful public debut.
