For cryptocurrency fintech and stablecoin issuer Circle, going public has long been part of the plan.
“A few years ago, in 2017-2018, when we created USDC, we asked ourselves if we’re going to create a new base layer of money for the internet that moves at the speed of the internet, how could we do it in such a way that it would be built to last,” Circle’s President Heath Tarbert told American Banker in an interview Thursday afternoon following the fintech’s IPO debut.
“Going public and subjecting ourselves to the highest standards of transparency as an American public company — as well as corporate governance — is sort of part and parcel of who we are, and is the necessary next step, in our view,” Tarbert said.
Circle debuted its IPO on Thursday to critical investor acclaim after twice upsizing the offering.
The company is best known for its USDC stablecoin, a fully backed, 1:1 digital currency pegged to the U.S. dollar that can be used for faster cross-border payments. The company also has a payment network, called Circle Payments Network, that connects banks, payments companies and digital wallets.
There was about $60 billion of USDC in circulation as of March 31, according to the company.
Circle’s IPO ends the fintech’s four-year go-public saga. Circle first started exploring an IPO through a reverse merger with special purpose acquisition vehicle Concord Acquisition Corp in July 2021, and later terminated that agreement in December 2022.
What follows is a transcript of the interview, edited for length and clarity.
Why did Circle decide to go public now?
HEATH TARBERT: We actually decided to go public a long time ago. It was always part of the plan. Circle has always used our transparency, regulation and compliance and a risk management ethos as part of our comparative advantage.
Particularly because our strategy in building the world’s largest and most widely used stablecoin network is to partner with the bluest of the blue chip firms around the world, whether they’re banks, exchanges or corporates. Being listed reinforces that credibility.
What opportunities does Circle’s IPO open up for the company and the wider stablecoin industry?
It’s important to realize that Circle is an internet platform. We are built on the open internet, and we are an internet company that is also a financial services company. In that regard, we’re rare. And the more people that understand who we are and the unique power of stablecoins, is something that is really important to us. The IPO in many ways makes that very clear.
The other thing that is really important about Circle, when you think about us compared to the traditional financial institutions, is we are a neutral platform. You can partner with Circle, you can become part of our stablecoin network and you can gain a great deal. We have that traditional financial services regulatory compliance bent but we also have that Web3 ethos.
How do you see Circle further working with banks?
One of the great things when I think about banks in particular is that banks are ideal partners to Circle. We have banks around the world that are our partners and provide the on and off ramps, for example, so their clients can get access to USDC.
I see that only developing because ultimately, we’re not going after our customers’ customers. We’re not competing with them.
We ultimately work with the large institutions so their customers can in turn make use of stablecoins. So going public also signals to banks and the tech firms that their money is now open and they can do business with Circle in an important way with the blessing of the regulators.
The Circle Payment Networkwhich was just created to facilitate cross-border flows, actually has four globally systemically important banks who were advisors to creating the architecture of that.
On the technology side, we’ve seen a decoupling of stablecoins from the cryptocurrency market over the last year. The trading goes up and down, but stablecoins continue to grow and grow. People are starting to realize, “Wait a minute here. Stablecoins aren’t a crypto thing, this is a payment system innovation.”
Then you have the regulatory backdrop, where you have the current financial regulators saying stablecoins are perfectly fine and in fact, are arguably encouraging banks to get into these markets because it’s important that there’s a technology upgrade.
Some large global banks have floated the idea of launching their own stablecoin. How is Circle thinking about the role of its network as stablecoins become more ubiquitous?
First of all, we welcome the competition, because the competition will actually prove to the world the criticality and importance and the technical superiority of stabelcoins.
The global market for legal electronic cash is $60 trillion. Citibank estimates that the global stablecoin market will grow to $3 trillion in just a few years’ time. The more reputable firms that come into this market alongside us, the more it will actually grow the market.
Banks are not used to open internet architecture. They’re used to much more closed systems. They also have to think about, “If we get into the stablecoin business, we may crowd out our own deposits – deposits that we can lend out at much higher rates.”
Circle upsized its offering twice, and shares nearly tripled in the first hour of trading Thursday. What are your plans for deploying that capital?
We have a lot of capital on our balance sheet and we want to build the world’s largest and most widely used stablecoin network. Given that we’re on what I think is an inflection point of a massive use case, we want to make sure we have that capital reserve so we can take advantage of that as regulations come into play all over the world.
At the same time, we’re developing products up the technology stack, which would be our applications like Circle Payments Network. We’re also enhancing our infrastructure, like the cross-chain transfer protocol, which allows you to take a stablecoin on Solana and move it nearly instantaneously to ethereum.
