Wednesday, June 29, 2022
HomeTechnologyCircle, the company behind the USDC stablecoin, doubles valuation to $9 billion

Circle, the company behind the USDC stablecoin, doubles valuation to $9 billion

Circle, the firm behind the stablecoin USDC, has doubled its valuation to $9 billion following a new deal with blank-check company Concord Acquisition Corp.The two companies first revealed their plans to merge in July, in a deal that at the time valued Circle at just $4.5 billion. They have now updated the terms of the deal to reflect improvements in the company’s financial outlook and competitive position. Circle CEO Jeremy Allaire told CNBC’s “Crypto World” that while the firm is ready to be listed as a public company, the process of getting the necessary approvals by the Securities and Exchange Commission had taken longer than planned. That’s because in an earlier agreement, the firms were concerned they wouldn’t merge in time for an April 3 deadline. This new deal replaces the prior agreement — and gives them more time to complete the combination.”We have an SEC qualification process that we’re going through, we’ve been through multiple rounds of comments on that and that’s just taking longer,” Allaire said. He added that the extra time is necessary to a new company and industry, and that if approved, Circle will be better off for it down the line.”The SEC is doing its job,” Allaire said. “There’s a lot of inherent risk in this space… as a company that wants to be trusted, transparent, and accountable, being a public company really helps with that. But also, going through the rigor of SEC review is a key part of that.”Circle may be twice as expensive for shareholders of Concord, the SPAC planning to take it public, but Allaire said he sees it as a testament to what his company is building.He also said that although several SPAC, or special purpose acquisition company, mergers have been called off recently, he’s confident this refreshed plan will go through. The agreement has an initial outside date of Dec. 8, with an option to extend to Jan. 31 of next year, Allaire said.Stablecoins are digital currencies designed to be less volatile than cryptocurrencies by pegging their market value to an outside asset like the U.S. dollar. That makes them potential bridge currencies between volatile crypto assets and more stable, traditional assets.Circle’s stablecoin, USDC, has increased in reach and popularity over the past year. For example, Mastercard last summer said it’s piloting a program that would utilize USDC to enable cryptocurrency payments between cardholders and merchants.However, stablecoins have come under pressure in recent months by U.S. regulators concerned about their ability to threaten financial stability, by increasing the interconnectedness between the regulated financial system and the crypto markets.Earlier this week New Jersey Rep. Josh Gottheimer unveiled an early draft of legislation aimed at placing definitions around stablecoins. In November, the Biden administration in urged Congress to regulate stablecoins to ensure they don’t pose a systemic risk.

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