Circle Eyes US Return, Plans IPO with $33B USDC Surge

Circle to relocate to the US amid $33 billion USDC stablecoin's recovery and ahead of its IPO, signaling strategic and regulatory shifts.

By Athena Xu

5/15, 00:54 EDT
Bitcoin / U.S. dollar
Coinbase Global, Inc.
Goldman Sachs Group, Inc.

Key Takeaway

  • Circle, issuer of the $33 billion USDC stablecoin, plans to move its legal base to the US from Ireland ahead of a US IPO.
  • The shift may increase Circle's tax burden but aligns with broader crypto market rallies and recovery in USDC circulation.
  • Backed by major firms like Goldman Sachs and Coinbase, Circle's move signals strong institutional support for stablecoins.

Circle's Strategic Homecoming

Circle Internet Financial Ltd., the issuer behind the $33 billion stablecoin USDC, has initiated a significant shift in its corporate structure by planning to move its legal base back to the United States from the Republic of Ireland. This decision, confirmed by a company spokesperson, comes amidst Circle's confidential submission for an initial public offering (IPO) to the US securities regulator earlier in January. The move is poised to place Circle under the US's more stringent tax regime, contrasting with Ireland's historically low corporate taxes that have attracted global corporations like Apple Inc. and Pfizer Inc. However, global tax reforms led by the Organization for Economic Cooperation and Development (OECD), which introduce a minimum 15% tax on profits for larger multinationals, are diminishing Ireland's tax advantages.

USDC's Resilience and Recovery

USDC, Circle's flagship stablecoin, has demonstrated remarkable resilience and recovery amidst the volatile crypto market and banking sector challenges. The stablecoin's circulation soared to approximately $56 billion in June 2022, only to face a downturn following the collapse of Silicon Valley Bank, where a portion of USDC's reserves was held. Despite this setback, USDC's circulation has rebounded from a low of $24 billion earlier this year, buoyed by a broader rally in the crypto markets. Stablecoins like USDC are pegged 1-1 to fiat currencies and are backed by reserves of cash and bonds, with the recent spike in interest rates post-pandemic enhancing the profitability of stablecoin issuers.

Circle's Backing and Profitability

Circle's strategic maneuvers and the resilience of USDC are underpinned by robust support from Wall Street giants and the crypto community. With heavyweight backers including Goldman Sachs Group Inc., General Catalyst Partners, BlackRock, Fidelity Management and Research, Marshall Wace, and Coinbase Global Inc., Circle is well-positioned in the financial ecosystem. This support network is crucial as Circle navigates the complexities of its IPO and legal domicile shift. Moreover, the profitability of stablecoin operations, as evidenced by Tether Holdings Ltd.'s record $4.5 billion first-quarter profit, highlights the lucrative nature of the stablecoin market in which Circle is a leading player.