Circle, the U.S. financial technology company behind USD Coin, has announced plans to list on Wall Street because of an agreement with a blanket control company chaired by former Barclays boss Bob Diamond.
The group said Thursday it would combine with Concord Acquisition Corp. and a listing on the New York Stock Exchange. The deal, which Circle said gave the company $ 4.5 billion in value, is backed by some of Wall Street’s largest investors, including Marshall Wace, Cathie Wood’s Ark Investment Management and Daniel Loeb’s Third Point.
Circle manages the digital currency USD Coin, a stablecoin that is pegged to the US dollar. Stablecoins are destined to be a bridge between traditional and digital money, and will help manage volatility in crypto market prices. They are also often used as collateral to make it easier for customers to purchase other cryptocurrencies.
Circle’s move underscores a trend this year for crypto-focused companies to float on public stock markets. Coinbase, the exchange, debuts in New York April while Bakkt, a majority-owned cryptocurrency platform owned by the Intercontinental Exchange, is also because of the list after a combination with Victory Park Capital’s acquisition vehicle Its plan to list it before July has been delayed.
The company said there was now more than $ 25bn of USD Coin in circulation, up more than 3,400 percent this year. He said the stablecoin had supported more than $ 785 billion in businesses that were registered on its blockchain.
“Circle is the true pioneer of trusted digital currencies, an increasingly critical part of the global financial system,” Diamond said.
But global regulators are increasingly concerned that stablecoins – many of which are backed by hard currency reserves such as the U.S. dollar – pose a growing systemic risk. Boston Federal Reserve Chairman Eric Rosengren warned last month that they would be a “concern,” unless authorities step in to take control of the rapidly growing market.
Some cryptographic analysts have questioned the rigor of so-called large issuer certificates including Circle Publishers to show the amount and types of assets held in their reserves.
Jeremy Allaire, chief executive of Circle, said on Twitter that the group “intends to become the most public and transparent operator of stablecoins at full reserve in the market today.” He promised that the group would provide “a detailed summary” of USD Coin’s reserves.
In February, Tether, the largest stablecoin, and a related trading platform Bitfinex promised to offer more transparency on its reserves in terms of a $ 18.5 million deal with the attorney general’s office. New York. Companies have neither admitted nor denied the wrong.
Fitch, the credit rating agency, last week warned that a move to convert cryptocurrencies into traditional money could destabilize short-term credit markets. Both Tether and USD Coin say they hold billions of dollars in conventional short-term values in their reserves.
Under the terms of the USD currency listing agreement announced Thursday, Marshall Wace, Fidelity and Ark have pledged $ 415 million in capital while Concord will carry $ 276 million held in its account, largely from its IPO in December. .
Circle is co-founded by Allaire, the internet entrepreneur formerly behind the online video platform Brightcove. Diamond will join the board.
The business is scheduled to close at the end of the year.