Circle Files for IPO Amid U.S. Stablecoin Legislation Push

Circle, a prominent issuer of stablecoins, has formally submitted an application for an Initial Public Offering (IPO). This development coincides with the acceleration of stablecoin legislation in the U.S. Congress, signaling a new phase in the evolution of the cryptocurrency industry.

On April 1, Circle filed its IPO application with the U.S. Securities and Exchange Commission (SEC), with plans to list on the New York Stock Exchange under the ticker symbol CRCL. In a letter to investors, Circle's CEO, Jeremy Allaire, highlighted the significance of this move, stating that going public represents a critical juncture for the company and the broader internet finance system.

Circle's financial performance has been strong. According to the IPO application, the company reported a net profit of $1.56 billion and revenue of $16.8 billion for 2024. In 2023, the net profit was $2.68 billion, with revenue at $14.5 billion. Major shareholders include entities associated with Accel, Breyer Capital, General Catalyst, IDG Capital, Oak Investment Partners, and FMR. The IPO is being led by JPMorgan and Citigroup.

Founded in 2013, Circle has emerged as a major competitor to Tether, the largest stablecoin globally. The company has differentiated itself by emphasizing greater regulatory compliance and transparency in reserves compared to Tether. Stablecoins are cryptocurrencies pegged to another asset, typically the U.S. dollar. As of March 28, the circulating supply of Circle's USD Coin (USDC) stablecoin was $600 billion.

Circle faced turbulence in 2023 when Silicon Valley Bank, where a portion of its reserves were held, collapsed. Although Circle eventually recovered its deposits, it took several months for the market value of its circulating currency to recover from the crisis. In its IPO filing, Circle warned investors that, in addition to operational and industry competition risks, the lack of federal regulation could classify its stablecoin as a security, potentially impacting its business significantly.

Circle's IPO submission comes at a time when the U.S. Congress is advancing stablecoin legislation, a move long sought by the industry for regulatory clarity. The direction of this legislative process will have a substantial impact on Circle's future development.