Circle’s value increased to $9 billion after a deal with Concord Acquisition Corp. Circle is the company behind one of the main stablecoins in the crypto space, USDC.
In July 2021, the two companies announced their plans to merge. Back then, the value of Circle was at $4.5 billion. The terms of the deal have been updated to reflect changes in the company’s financial outlook as well as its competitive position.
Circle’s CEO, Jeremy Allaire, stated that the company is ready to be listed publicly, but it took longer than expected for the Securities and Exchange Commission to approve it. However, the new agreement replaces the previous one and allows them to take more time to complete the merger.
Allaire stated that they are currently going through an SEC qualification process. There have been multiple rounds of comments and it is taking longer. Allaire said that extra time is needed for a new industry and company and that Circle would be better off if it was approved.
Allaire stated that “the SEC is doing their job.” “There is a lot of inherent danger in this space… As a company that wants transparency, accountability, trust, and transparency, being a publicly-traded company really helps.
Circle might be twice as costly for Concord shareholders, with the SPAC intending to take it public. But Allaire stated that he views it as a testimony to the company’s progress.
He stated that even though several SPAC (special purpose acquisition company) mergers were cancelled recently, he is confident that this new plan will succeed. Allaire stated that the agreement will have an initial outside date of December 8, with an option for extension to January 31st of next year.
Stablecoins, digital currencies that are pegged to an external asset such as the U.S. Dollar, are designed to be less volatile and more stable than cryptocurrencies. This makes them potentially bridge currencies between volatile crypto assets, and more stable, conventional assets.
Circle’s stablecoin USDC has seen an increase in popularity over the past year. Mastercard stated last summer that it is piloting a program using USDC to allow cryptocurrency payments between cardholders, merchants, and cardholders.
In recent months, however, U.S. regulators have been putting pressure on stablecoins because they could threaten financial stability by increasing interconnectivity between the regulated financial system, crypto markets, and the financial system.
An early draft by Josh Gottheimer, a New Jersey Representative, was unveiled earlier this week. It aims to define stablecoins. In November, the Biden administration in asked Congress to regulate stablecoins so they don’t pose any systemic risk.