TL:DR
•Circle, a stablecoin provider, is no longer set to list publicly.
• The decision was approved by the directors of both Circle and Concord Acquisition Corp.
• Circle had been eyeing an entry into the stock market via a merger with Concord Acquisition Corp., a New York Stock Exchange (NYSE) listed special purpose acquisition company (SPAC) backed by former Barclays CEO Bob Diamond.
• The agreement between the two companies would have valued Circle at $9 billion, an increase from the $4.5 billion which was originally announced in July 2021.
• According to its CEO Jeremy Allaire, Circle is still set on becoming a public company but there is no clear timeline for when this will happen.
Circle Backtracks
Just months after announcing its plans to go public via a merger with a special purpose acquisition company (SPAC), digital currency company Circle has called off the deal citing bad timing. If successful, the listing would have made Circle one of the first publicly traded stablecoin companies in the United States. However, after months of negotiations, both parties have mutually agreed to terminate their talks and refocus their efforts on other opportunities.
This is a major shift in plans for the company, which had been confident in its ability to weather the current regulatory landscape despite concerns from some investors. In a statement released by Concord Acquisition Corp., CEO Anu Duggal said, “Although we believe that now is not the right time for this transaction given changed circumstances in the digital token and cryptocurrency markets, we are proud to have worked with such an exceptional team at Circle.”
A Trend
It’s worth noting that this isn’t the first time a cryptocurrency-related SPAC deal has fallen through. In March 2021, Social Finance (SoFi) and IPOE II Holdings also called off their planned merger that would have taken SoFi public. The $8 billion deal would have been the largest SPAC deal ever completed, but SoFi cited market uncertainty and increased regulation as reasons for scuttling the deal.
Circle’s decision to walk away from its public listing plans comes as stablecoin usage is on the rise globally. According to a report released by audit firm PricewaterhouseCoopers (PwC), there were over $500 billion worth of transactions conducted using stablecoins in 2020, more than double the amount from 2019. With more traditional financial institutions beginning to adopt stablecoins, it’s likely that we’ll see even more growth in this area in the coming years.
While it’s disappointing to see Circle’s public listing plans fall through, it’s understandable given the current market conditions. It’s also worth noting that this isn’t the first time a cryptocurrency-related SPAC deal has fallen through. With more traditional financial institutions beginning to adopt stablecoins, it’s likely that we’ll see even more growth in this area in the coming years. Whether or not we’ll see another attempt by Circle to go public remains to be seen, but one thing is for sure: the digital currency landscape is only getting more exciting.
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