PYMNTS-MonitorEdge-May-2024

Report: Circle to Shift Legal Base to US From Ireland

As it prepares to go public, stablecoin issuer Circle is reportedly also planning a move.

The company is preparing to transfer its legal base from Ireland to the United States, Bloomberg reported Wednesday (May 15). A company spokesperson confirmed to the news outlet that Circle filed paperwork for the move but declined to say why.

Circle earlier this year confidentially filed paperwork for an initial public offering (IPO) with the Securities and Exchange Commission (SEC). The company — which issues the stablecoin USDC — had initially planned to go public in 2022 through a $9 billion special purpose acquisition company (SPAC) merger.

However, that deal was suspended while the company waited for the SEC to approve its S-4 registration document. Circle later said it recognized the necessity of a thorough review.

“We never expected the SEC registration process to be quick and easy,” the company said in January 2023. “We’re a novel company in a novel industry.”

Stablecoins are a variety of cryptocurrencies built to maintain a stable value by tying their worth to a fiat currency, such as the U.S. dollar. Unlike traditional cryptocurrencies such as bitcoin, which are notorious for their price fluctuations, stablecoins provide a level of stability that mirrors that of traditional currencies.

Last month, Visa and Allium Labs’ new stablecoin transaction metric found that the USDC coin began to exceed Tether in terms of stablecoin transaction volume. These findings went against expectations, as Tether is typically viewed as the sector’s top stablecoin.

According to Visa, USDC saw $456 billion in transaction volume in one week compared with $89 billion for Tether’s USDT stablecoin. USDC has also accounted for half of total transactions since the year began, the report said.

However, the same Visa/Allium metric later determined that most stablecoin transactions were driven by bots, with fewer than 10% involving “organic payments activity.”

The findings show “that stablecoins are still in a very nascent moment in their evolution as a payment instrument,” Pranav Sood, executive general manager for Europe, the Middle East and Africa at payments platform Airwallex, said at the time.

“That’s not to say that they don’t have long-term potential, because I think they do,” Sood added. “But the short-term and the mid-term focus needs to be on making sure that existing rails work much better.”

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PYMNTS-MonitorEdge-May-2024