Circle revives IPO plans following failed $9B SPAC merger

Circle Internet Financial Ltd., the company behind the market’s second-largest stablecoin, is reportedly considering an initial public offering (IPO) as early as 2024.

Insider sources told Bloomberg the firm is in talks with advisers to iron out the details of the prospective listing, though there’s no certainty that Circle will decide to proceed with an IPO.

The stablecoin issuer, with a market cap of over $24 billion, is treading cautiously as it navigates the preliminary stages of going public. The valuation Circle might seek in its IPO remains undisclosed. However, its valuation hit the $9 billion mark during a failed attempt at a public listing via a blank-check deal with Concord Acquisition in 2022, providing a potential benchmark.

The company’s journey towards becoming a publicly traded entity has seen its share of twists and turns. In February 2022, Circle delayed its listing and renegotiated its agreement with Concord to double its proposed value. At the time, Circle said it amended the deal terms as its financial outlook and market share had improved.

Since then, the deal has been stuck trying to get through the US regulators’ long and arduous checks, and the crypto market crash ultimately made it tougher. Despite the setback, Circle has maintained that an IPO aligns with its long-term strategic goals.

The Boston-based company is backed by finance giants such as Goldman Sachs, Fidelity, and BlackRock. Its flagship asset, USDC, is the world’s second-largest stablecoin with a market capitalization of $24.4 billion, trailing only Tether’s USDT, which boasts a market cap of over $86.1 billion.

An IPO would subject Circle to a meticulous regulatory framework, a contrast to the more streamlined SPAC route. With the SEC filings and investment bank underwriting that accompany a traditional IPO, Circle would embark on a path to capitalize on public market opportunities.

Earlier this year, Dante Disparte, the chief strategy officer of Circle, denied the rumors that the dollar-pegged stablecoin issuer received a “Wells Notice” from the US Securities and Exchange Commission (SEC). The rumors surfaced after the NYDFS investigated Paxos over whether it was meeting rules around custody of Binance BUSD. Shortly after that, a Bloomberg report claimed that it was rival stablecoin issuer Circle that sounded an alarm.

Per the report, Circle complained to the New York regulators that Binance did not have enough reserves to back up the BUSD tokens. However, Binance CEO Changpeng Zhao, while addressing ongoing FUD around the stablecoin, said there is no substance to recent rumors that Circle founder Jeremy Allaire secretly told NYDFS to look into Paxos and BUSD.