USDC Issuer Circle Set To File For IPO By April, Eyes $5 Billion Market Valuation

Circle Internet Financial, the issuer of the second largest stablecoin, USDC, is advancing its long-planned initial public offering (IPO) by hiring JPMorgan Chase and Citi as underwriters. 

According to a recent report by Fortune, the fintech company is expected to publicly file its offering paperwork by the end of April, with an eye toward achieving a valuation between $4 billion and $5 billion.

Circle Moves Forward With IPO Plans After Previous Failure

The exact timing of the IPO remains uncertain, but typically, companies that file for an IPO can expect their shares to begin trading approximately four weeks later. However, some firms may remain in registration for months before launching their public offerings. 

This marks Circle’s second attempt at going public. In 2021, the company announced plans to merge with a special purpose acquisition company (SPAC) backed by an investment firm. 

However, regulatory complications arose when the US Securities and Exchange Commission (SEC) did not approve the proposed merger, which was extended multiple times. 

Ultimately, Circle abandoned the SPAC plans at the end of 2022, following the collapse of the FTX and a broader crypto market downturn. In 2024, the stablecoin issuer made a confidential filing with the SEC for a traditional IPO, which is now moving toward public disclosure.

The impending public filing is significant as it will provide detailed insights into Circle’s financial health for the first time. This filing will also reveal the company’s proposed ticker symbol and could pave the way for a public listing of its shares. 

If successful, Circle’s IPO would represent the largest cryptocurrency-related IPO since Coinbase went public in 2021 through a direct listing, with JPMorgan and Citi also serving as financial advisors for Coinbase.

USDC Sees Market Cap Rebounds To $60 Billion 

Circle has undergone several transformations, shifting from various business lines focused on payments and crypto trading to a concentrated focus on stablecoins around 2018. 

Its flagship product, the USD Coin (USDC) stablecoin, was initially envisioned as a consortium among financial firms through an organization called Centre, though it eventually became primarily associated with Coinbase. 

In 2023, Centre was dissolved, and both companies restructured their partnership to manage USDC, allowing Coinbase to continue receiving a significant share of the stablecoin’s revenue.

USDC gained traction during the crypto boom of 2021, with its market capitalization skyrocketing from under $1 billion in 2020 to over $50 billion in 2022, benefiting from the interest generated by the dollar-backed assets supporting USDC, including US Treasuries.

However, the company faced significant challenges, particularly in March 2023, when it revealed that $3.3 billion was trapped at Silicon Valley Bank, which caused USDC to briefly lose its $1 peg on secondary trading platforms. 

By the end of 2023, USDC’s market capitalization fell to under $25 billion but has since rebounded to around $60 billion. Tether on the other hand, issuer of the market’s largest stablecoin, USDT, boasts a market capitalization of $143 billion, according to CoinmarketCap data. 

The advancement of stablecoin legislation in Congress could also serve as a bullish indicator for Circle, with the Senate Banking Committee recently moving forward with a bill and the House expected to vote on its version soon.

The now pro-crypto President, Donald Trump, has also expressed a desire to sign stablecoin legislation by August of this year, further signaling potential regulatory support for the industry.

Featured image from DALL-E, chart from TradingView.com