Circle, the company behind USDC, announced earlier this week that it had terminated its deal with Concord Acquisition Corp (Concord), a publicly traded special purpose acquisition company (SPAC), and signed a new agreement with it, setting Circle’s enterprise value at US$9 billion:
Circle Value Doubles in Six Months
As reported by Crypto News Australia last July, Circle planned to go public at a valuation of US$4.5 billion, as per the original deal with Concord. However, this new agreement has doubled Circle’s value from 2021, driven mostly by improvements in the firm’s financial outlook and competitive position.
Specifically, USDC has enjoyed tremendous growth over the past year, as the stablecoin’s circulation has more than doubled since the original deal was announced, reaching US$52.5 billion.
We continue to believe that Circle is one of the most interesting, innovative and exciting companies in the evolution of global finance and we believe it will have an historic impact on the global economic system.
Bob Diamond, chairman of Concord Acquisition Corp and CEO of Atlas Merchant Capital
Last year, Circle’s proof of reserves were independently audited, revealing that 60 percent was made up of cash, with the balance being held in debt securities and bonds. The incumbent, Tether (USDT), has been less transparent and perhaps this accounts for its loss of market share to USDC over the past 12 months, reflected in the chart below:
Chairman of Concord, Bob Diamond, highlighted the importance of transparency in his comments:
Circle’s rapid growth and world-class leadership are underscored by a regulatory-first mindset fixed on building trust and transparency in global markets. We believe our new deal is attractive because it preserves the ability of Concord’s public stakeholders to participate in a transaction with this great company.
Bob Diamond, chairman of Concord Acquisition Corp and CEO of Atlas Merchant Capital
While the new transaction agreement has been approved by Concord and Circle’s board of directors, it still requires shareholder approval in both cases, in addition to any relevant regulatory approvals:
We [Circle] have made massive strides toward transforming the global economic system through the power of digital currencies and the open internet … being a public company will further strengthen trust and confidence in Circle and is a critical milestone as we continue our mission to build a more inclusive financial ecosystem.
Jeremy Allaire, Circle co-founder and CEO
Crypto Twitter Remains Sceptical
While stablecoins no doubt have practical use cases, including swift cross-border transfers and instant settlement, scepticism remains among the crypto community.
Some have noted concerns that users could be banned (or more specifically, have their addresses blacklisted):
Others expressed a sense of distrust that Circle would be involved in the Federal Reserve’s CBDC:
Whatever benefits USDC is able to offer, sentiments such as these are largely expected, given Circle’s relationship with the World Economic Forum and Wall Street.
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