Since around the beginning of this month, Circle has been implementing a $4.5 billion worth merger deal with Concord Acquisition Group – which is a SPAC.
Circle is the principal operator of USD Coin (USDC) – one of the fastest growing stablecoins and second to USDT. USDC has supported about $700 billion in transactions.
As Circle is going public and increasing, it will have to further disclose the assets that are backing up the USDC because regulators would want to know.
Circle seems to be quite transparent about its declaration of fiat collateral as the Grant Thornton accounting firm always audits to ensure USDC’s reserves.
Therefore, some are quite baffled as to the reasons Circle chose the SPAC route rather than the traditional IPO route, hoping it might be a way to “boycott” regulators. Recall that in late February this year, Tether paid a fine of $18.5 million because it gave an inaccurate degree of how fiat collateral backs its stablecoin.
Special Purpose Acquisition Company, otherwise known as SPAC, is a way through which a private company goes public without encountering the traditional or usual Initial Public Offering procedures.
Having said that, there has been diverse arguments about whether or not Circle should have gone public at this moment considering the general state of the market and cryptocurrency orientation.
On this, Vladimir Vishnevskiy who is the Co-founder of St. Gotthard Fund Management AG said: “This is a segment of the digital asset market with little competition. Also, the fact that they have decided to go ahead must mean they are confident of a successful result and achieving the valuation.”