Circle confirms plans for public listing in Q4 2022

The co-emitter of the USD Coin (USDC) stablecoin, Circle, will go public in the fourth quarter of 2022. This was confirmed in an interview with Decrypt by its CFO Jeremy Fox-Djin.

The top executive said that an inverse merger with SPAC Concord Acquisition Corp will occur regardless of market conditions. In February Circle, under the updated agreement valued it at $9 bn.

Fox-Djin acknowledged concerns from the community about the firm’s resilience in light of the Terra collapse and a string of troubles that some industry participants faced.

The executive assured that the issuer itself could not interact with problematic players, as the law “unambiguously requires that USDC reserves be held only in a defined set of instruments”.

“We are not allowed to provide loans in them [stablecoins], to lend on collateral, or use them to pay bills. Collateral is held in segregated accounts in accordance with the Money Transmitter Act. Such a regulatory framework applies to PayPal, the Venmo operator, Block’s Cash App, or Apple’s Apple Pay. It protects hundreds of millions, if not billions, of private individuals with billions of dollars”,— said Fox-Djin.

Under the U.S. Bankruptcy Code, the USDC reserve fund is afforded all protections, he explained.

The Circle CFO said he was not aware of any companies approaching the stablecoin issuer with requests for borrowings. Any such arrangement under the law would have to be disclosed in publicly available documents with the SEC, the executive added.

Fox-Djin also touched on Circle Yield. In the face of regulator pressure on players offering such instruments, the firm registered its offering with the Bermuda Monetary Authority.

According to him, Circle Yield features over-collateralization in Bitcoin, and the evaluation process occurs twice daily, seven days a week, which has helped avoid problems in recent months. “Flawless risk management” has not led to client losses, Fox-Djin added.

On July 18, Dante Disparte, a member of the Centre’s consortium board of directors, presented 19 principles for stablecoin regulation. The initiative forms part of the firm’s efforts to shape a regulatory framework for “stablecoins”.

The principles include, among other things, preserving the ability for non-bank issuers, coexistence with CBDC, privacy, transparency and disclosure.

Circle has, recall, presented the first monthly report on USDC collateral and pledged to move its publication to a daily basis.

In April 2022, Circle CEO Jeremy Allaire said the company was preparing to apply for a crypto-banking license in the US. He said this would happen “in the near future”.

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