Following the speed of its partner Coinbase, Circle, the operator of the U.S. dollar stablecoin USDC, officially announced on July 8 that it plans to go public through a uniting with a “special purpose acquisition company”( SPAC ).
Circle said that it will incorporate with Concord Acquisition Corp( NYSE: CND ), a bad-checking company, to achieve the purpose of listing. This event may eventually bring the company’s valuation to $4.5 billion.
According to the terms of the agreement, a newly established Irish holding company will acquire Circle and Concord and become a company expected to be listed on the N. y. stock exchange( NYSE) for the purposes of the ticker epitomize “CRCL”. After the transaction is completed, existing Circle shareholders will impound nearly 86% of the rolled company.
History of Circle
Created in 2013, the company initially wanted to create a mainstream bitcoin payment platform. But the company later swiveled to create a social payments app. Circle became a sort of Venmo clone with some blockchain technology under the hood. At some time, Circle even removed the ability to send and receive bitcoins.
” We never were just thinking about ourselves as a bitcoin startup. The media certainly grouped us on that highway because we were involved with the technology. From the day we founded the company three years ago we’ve focused on trying to build a brand-new consumer finance company. And one that moves funds to study the behavior of internet laborers ,” Circle co-founder and CEO Jeremy Allaire told TechCrunch’s Natasha Lomas in 2016.
While that consumer frolic didn’t take off, it’s interesting to see that Allaire was already thinking about being able to programmatically move funds. In 2017 and 2018, the company pivoted once again to focus on cryptocurrencies. It propelled an over-the-counter trading desk for big cryptocurrency investors.
It acquired Poloniex, one of the largest cryptocurrency exchanges in the U.S. at the time. It likewise launched Circle Invest, a really simple mobile app that lets you buy and sell a handful of crypto assets.
But Circle’s most promising product has been its stablecoin — USD Coin, or USDC for short. As the epithet recommends, 1 USDC is always worth 1 USD. Unlike traditional cryptocurrencies, you can be sure that the value of USDC isn’t going to fluctuate like crazy. Auditing houses regularly check that issuers ever keep as many USD in bank accounts as USDC in circulation.
With USDC, moving funds from one pouch to another becomes as easy as employing standard API calls. The fellowship has then contributed numerous infrastructure concoctions around USDC, such as Circle Accounts. Circle has also built ramps to bridge the gap between fiat money and cryptocurrencies.
Private Equity Receives USD 415 Million Investment Commitment
In the Circle transaction, in the so-called “Private Equity Investment( PIPE) ” portion, an investment commitment of US $415 million has been attracted. Combining the reliance cash and Circle’s previous convertible alliance protections financing, this transaction will eventually be the The company provides total revenue of more than 1.1 billion U.S. dollars.
Backdoor rostered companionships often cause funds through PIPE. Although most participants are institutional investors, they sometimes include tactical investors. Circle’s PIPE financing has been supported by major institutional investors such as London fund giant Marshall Wace, Fidelity Management& Research Company, an investment advisor to Fidelity Fund, and Adage Capital Management, a Boston fund company.
After the learning, Circle co-founder and CEO Jeremy Allaire will continue to serve as the company’s CEO, while Concord Chairman Bob Diamond will join the board of directors. According to the announcement, the transaction has been unanimously approved by the board of directors of Concord and Circle, and is still subject to the approval of the stockholders of the two companies.
The above-mentioned acquisition is expected to complete all procedures in the fourth quarter of this year after obtaining regulatory acceptance and meet customary closing conditions.
“Compliance and transparency” is the most eye-catching sign of USDC
At the end of May this year, Circle elevated $440 million in private investment from a series of private equity, institutional and strategic investors. In addition, Circle too received funding support from the Wall Street investment bank Goldman Sachs in the early days. At the same time, Goldman Sachs is also Concord’s exclusive monetary advisor.
As a fast-growing stablecoin, the most eye-catching label on USDC is compliance.
In October 2018, USDC was officially issued by the CENTRE enterprise alliance consisting of the “first encrypted shares” Coinbase and Circle. Compared with USDT, which has less transparent U.S. dollar reservations, USDC has a third-party audit company that regularly issues reliable reports to prove it. This US dollar stablecoin, which focuses on “compliance development”, is therefore regarded by the industry as a beneficiary under the US regulatory framework.
In fact, Circle has always emphasized at the beginning of USDC that the company’s operations are transparent, and the regular and believable reports of third-party auditing companies can be used to prove that the issuance of these stablecoins is based on the full amount lodged in third-party banks. U.S. dollars are used as reservations. At the same time, USDC’s assets are under the custody of banks, and banks have higher requirements of the regulations, and funds are relatively safer.
In terms of conformity, Circle has already trained fee permissions in the United Country, the United Kingdom government, and the European Union, and has a compliance channel for the U.S. dollar, British pound, and euro to enter and outlet digital resources. Circle was once known as the company with the biggest number of licenses in the crypto asset industry in the world. In addition, partners who subsequently join its ecosystem and edition USDC must also contain a neighbourhood digital asset industry license.
The rise of Circle
In January this year, the United Position’ largest bank regulator, the U.S. Department of the Treasury’s Office of the Comptroller of the Currency( OCC) announced on its official website that U.S. banks are allowed to use blockchain and U.S. dollar stablecoins as colonization infrastructure in the U.S. financial system.
Credit card giant Visa announced in March this year that its world pay system will submerge 60 million merchants connected to USDC, allows people to directly use USDC to settle deals and even impel cross-border payments, and be stressed that no law currency shift is involved in the transaction process. It can be called a breakthrough in digital payment integration with cryptocurrency.
Earlier this year, Circle co-founder Jeremy Allaire predicted that the company’s USDC is catching up and is expected to surpass payment giant PayPal in terms of dollar transaction volume.
On June 30 th, according to the draft announcement of the USDC Management Center, it is expected that in the next few months, USDC will be available in the 10 Avalanche, Celo, Flow, Hedera, Kava, Nervos, Polkadot, Stacks, Tezos and Tron( TRON) Issued on the blockchain network.
This will be a large-scale “money printing” plan, which not only shows that the issuance of USDC is about to increase, but also means that the circulation of the stable currency will increase exponentially.
