Circle — the global leader in consumer finance for the digital age — today inked a deal with Goldman Sachs to list the company’s stablecoin, USD Coin, on a crypto exchange. This partnership means that Circle’s crypto business will be able to build a bridge to traditional finance, and make USD Coin available to the broader public. We are thrilled to be partnering with Goldman Sachs to bring this transformative product to the public, the step that Circle has been working towards for some time now.
Singapore-based stablecoin company Circle, is going public! The company has announced that it is planning to offer a public offering of its securities in the form of a subsidiary called “Circle Stock” (which is the company’s new ticker symbol). The plan is to launch the public offering in mid-July. Circle plans to use the proceeds from the offering to continue to develop its products and services.Prices may be falling today, but there are clear signs that the market is not dead. Here’s an excellent example…
No doubt Circle, like many dozens of projects waiting for more favorable market conditions before launching, would rather wait a few weeks before making such an announcement. In this case, it looks like the opportunity is gone forever if they don’t act fast.
The decision to go public through a special purpose acquisition company (SPAC) rather than a traditional IPO is a page out of the Coinbase playbook.
The existing legal requirements for selling your shares to an individual buyer are much more lenient than for an underwriter issuing new shares to the general public.
With SEC Chairman Gary Gensler making the fight against SPACS a top priority, it’s easy to see why waiting for the market to improve isn’t the best option.
Still, a $4.5 billion valuation is not bad at all for a cryptocurrency company, especially given the uncertainty of the market.
However, this is not just any cryptocurrency company, and the above number is actually quite low, at least in my opinion.
Those of you who have been reading this daily newsletter for a while probably already know my views on the future of central bank digital currencies (CBDCs) in the US.
In other words, a centralized FedCoin is unlikely to see the light of day anytime soon. They’re too far behind, and that’s not how the system works.
Most US dollars are not born at the Federal Reserve or even the Treasury Department, but at the banks themselves. When someone takes out a loan, the bank pushes a few buttons and magically creates money.
With fractional reserve banking, the bank only needs to keep a very small amount of cash in its treasury. At the beginning of the pandemic, reserve requirements were set at zero, which meant banks could lend as much money as they wanted without holding anything in their reserves, but that aside.
This is actually very good for the system because it reduces the chance of infection. If Wells Fargo goes bankrupt, it won’t bring down the entire U.S. economy.
Instead, all dollars in circulation could be traced directly to their origin, and a small premium could apply to dollars issued by strong institutions.
However, many existing financial institutions do not issue their own coins, but use a third-party service to issue stackable coins for them.
Currently, there is only one currency that is widely used and complies with all known US rules, and that is the USD currency.
We think the USD currency has a good chance of becoming the most common variant of the US dollar.
However, in its current state, it does not even come close to the market leader, Tether, which accounts for the lion’s share of trading in the cryptocurrency market.
Yesterday, the 7th. In July, Tether posted revenue of about $51 billion, while the USD coin only turned over $2.3 billion. But if you look at market capitalization, which is a better representation of how much money is actually in stablecoin, the USD coin is gaining ground.
This chart shows the respective market values of the major cryptocurrencies, and we can see that the market share of USD coins is gradually increasing while the whole industry is experiencing explosive growth.
Loan rates on some of the major DeFi sites can also serve as a good indicator. In general, the yield of a tui is slightly higher than that of a USD currency.
So while Tether is more accessible and liquid, the USD currency is simply considered a more stable investment vehicle.
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