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Circle moves closer to the US... and faces regulation ahead of IPO

Circle Internet Financial Ltd, issuer of the USDC stablecoin, is making a strategic decision to relocate its legal base. The company plans to move its headquarters from the Republic of Ireland to the United States.

The move comes ahead of the upcoming IPO. Many see the move as a major change for the company as it adapts to the regulatory environment and seeks to build market confidence.

Moving to the United States could pose challenges for Circle

Share a report Bloomberg Recently confirmed by a Cercle spokesperson. They confirmed that the legal documents necessary for this process had been submitted on Tuesday. However, they did not share the reasons for the decision.

BeInCrypto previously reported that Circle had already filed for public disclosure with the United States Securities and Exchange Commission (SEC) in January. However, the company has not disclosed the number of shares it plans to dilute or the price range of its shares.

On the other hand, moving to the United States could pose challenges for Circle, including stricter taxes and a complex regulatory landscape. In fact, the regulation of cryptocurrencies and stablecoins in the United States is uncertain.

Notably Ripple Labs, the company behind cryptocurrency XRP, faced significant legal challenges from the Securities and Exchange Commission. This challenge caused Ripple to halt its plans for an IPO in the United States and consider alternatives abroad.

Circle's decision therefore indicates a strategic bet on regulatory clarity in the United States. Depending on future regulatory decisions, this could either help or hinder their growth.

Despite the potential obstacles, Jeremy Allaire, CEO of Circle, remains optimistic about the future of stablecoins and their regulatory environment. At the Milken Institute Global Conference 2024, Allaire highlighted the importance of regulatory clarity, scalable technology, and easy-to-use applications to expand USDC adoption and integration.

"I always said you need a clear organization. You need technology to become more scalable and more usable. And then you need people, consumer applications that people will interact with, that you are a company that accepts payments or a business end user, you need these to connect to this yard line here in the United States. "He said Allaire.


Allaire's confidence is also demonstrated by Circle's collaborations with traditional financial giants like BlackRock. Last month, Circle announced a new trading feature for investors in BlackRock's US Dollar Institutional Digital Liquidity (BUIDL) fund. They can now exchange their real-world token assets for USDC.

According to CoinGecko data, USDC is the second largest stablecoin by market capitalization. As of May 15, the market capitalization of USDC was $32.86 billion.

This represents approximately 21% of the stablecoin market share. It lags behind Tether's USDT, which has a market cap of $110.86 billion and a market share of 70.75%.

Learn more: Best stablecoins in 2024: USDT or USDC?

Stablecoin market shares.
Stablecoin market shares. Source: Queen Gekko

In 2022, USDC and USDT were in close competition. As of July 2022, USDC has over 40% market share, compared to around 50% for USDT.

However, 2023 has brought challenges for Circle, particularly due to banking issues in the United States. A portion of USDC reserves were also held by Silicon Valley Bank, which has been facing financial problems. This caused USDC to temporarily lose its peg, raising concerns among users and investors.

As Circle prepares for its IPO and re-domiciliation in the United States, its actions reflect a strategic pivot to align with U.S. financial regulations and market dynamics. With its strong industry partnerships and commitment to regulatory clarity, this move also positions Circle to strengthen its position in the stablecoin market.

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