Stablecoin Issuer Circle Announces $4.5 Billion SPAC Deal
Circle, the issuer of the USDC stablecoin, is set to go public in a merger with special purpose acquisition company Concord Acquisition Corp.
The deal values Circle at $4.5 billion and comes just weeks after the firm raised a $440 million funding round from investors including Fidelity, Marshall Wace and Willett Advisors, the investment arm for the personal and philanthropic assets of Michael Bloomberg, the founder and majority owner of Bloomberg LP.
USDC is currently the eighth-largest cryptocurrency by market capitalization, according to Marketplace.com. Among stablecoins, its $26 billion of market value trails only Tether’s $62 billion.
Concord Chairman Bob Diamond called Circle “the true pioneer of trusted digital currencies, an increasingly critical part of the global financial system,” in a statement announcing the deal.
“Through this strategic transaction and ultimate public debut, we are taking an even bigger step forward, with the capital and relationships needed to build a global-scale internet financial services company that can help businesses everywhere to connect into a more open, inclusive and effective global economic system,” Circle Chief Executive Officer Jeremy Allaire said in the statement.
Read more: Stablecoin Firm Circle to Go Public With SPAC: M&A Snapshot
Speaking to Bloomberg Television on Thursday evening, Allaire said the desire to go public came from the growth USDC was experiencing over the last year.
“We saw an enormous opportunity to both raise capital, but also more importantly build a significant public company with transparency and visibility to the enterprises and institutions that are building on top of us,” he said, adding that USDC operates on five different blockchain networks and was committed to adding more.
That increased transparency brought on by going public could help alleviate fears surrounding stablecoins. The deal announcement came on the same day that Senator Elizabeth Warren warned of the “highly opaque and volatile” nature of the cryptocurrency ecosystem.
Asked about the threat central bank digital currencies might pose for stablecoins such as Circle, Allaire pointed to how advancements on the internet have been led by private companies and not governments.
“I don’t think the strategy for the U.S. should be to try to out China, China,” said Allaire in reference to the potential of the U.S. Federal Reserve creating its own digital currency to compete with China’s digital yuan plans.
Diamond, the former head of Barclays Plc, said that his interest in doing a deal with Circle was because the company fit what Concord was looking for.
“It’s right down the middle of what we were thinking about when we issued our SPAC,” said Diamond. “It’s all about payments, and Treasury and transaction services.”
©2021 Bloomberg L.P.