With the entire crypto sphere suffering from periodic spasms of volatility in the wake of the FTX exchange’s spectacular fall from grace, this is not the time to go public. It is for this reason that Circle’s abandonment of its public flotation plans today is being met with stoic acceptance and a reflection of ground realities.
As a refresher, Circle is a US-registered financial services company that is behind the popular stablecoin, USD Coin (USDC). For the uninitiated, a stablecoin is essentially a tokenized form of the US Dollar, allowing its use across various blockchains in a seamless manner. A vast majority of stablecoins are backed by reserves, including US Treasuries, and are pegged to the USD on a 1:1 basis. As of October 2022, there were 43.507 billion USDC in circulation backed by assets worth $43.754 billion in reserve, including $35.720 billion in US Treasuries and $8.034 billion in cash.
This brings us to the crux of the matter. Back in July 2021, Circle entered into a definitive agreement with the Special Purpose Acquisition Company (SPAC), Concord Acquisition Corp. (NYSE:CND), to go public via a reverse merger between the two entities. This merger agreement had to be consummated by the 10th of December 2022, barring an extension that could be procured via a vote of the SPAC’s shareholders. However, in light of the ongoing adverse industry-wide environment, Circle and Concord have now called off their proposed merger:
“Circle Internet Financial (Circle) and Concord Acquisition Corp (NYSE: CND), a publicly traded special purpose acquisition company, today announced the mutual termination of their proposed business combination initially announced in July 2021 and amended in February 2022.”
We reported back in November that Circle Yield had an exposure of $2.6 million to the troubled crypto firm Genesis Global Capital, which was forced to halt all loan creations and redemptions in the wake of FTX’s bankruptcy.
The post Stablecoin Provider Circle Is Not Going Public After All as the SPAC Deal Collapses by Rohail Saleem appeared first on Wccftech.
