Cryptocurrency firm Circle has announced that it has terminated its previous agreement with Concord Acquisition Corp, a publicly traded blank check company – a SPAC. At the same time, it has signed a new deal with Concord Acquisition Corp for a new merger. If the transaction goes through, Circle would become a publicly traded company with a valuation of $9 billion.
Originally announced in July 2021, the merger was set to close in the fourth quarter of 2021. And it sounds like Circle wasn’t happy with the original deal that valued Circle at $4.5 billion. The company did not wait until the end date of April 3, 2022 to scrap it and sign a new deal.
Circle is better known as a founding member of the Center consortium with Coinbase. This consortium is responsible for managing USD Coin (USDC), a popular stablecoin. At any given time, one USDC is always worth one USD.
It is backed solely by cash, cash equivalents and short-term US Treasury bonds. These reserves are regularly audited by audit firms. This way you are not exposed to crypto volatility, but you can send and receive money from one wallet to another using code – it works like any regular cryptocurrency transaction.
Behind the scenes, USDC is available on various blockchains. Each blockchain offers different advantages and disadvantages depending on what you are looking for when it comes to fees, speed and convenience. USDC is currently available on Ethereum, Algorand, Solana, Stellar, Tron, Hedera, Avalanche, and Flow.
And USDC use is growing rapidly. In July 2021, Circle said it had $25 billion worth of USDC in circulation. That figure has more than doubled as USDC circulation has reached $52.5 billion.
In addition to reserve-related earnings, Circle offers several APIs and revenue-generating products. For example, the company helps you process payments and trigger payouts with simple API calls. It is compatible with many classic payment methods, such as card payments, bank transfers and ACH.
Developers can take advantage of these services to create ramps for their crypto products. And those “transactions and treasury services,” as Circle calls its API services, generate most of Circle’s revenue. Some companies that use Circle’s transaction and treasury services include Dapper Labs, Compound Labs, and FTX.
More recently, Circle has started offering Circle Yield. Businesses using Circle Yield can generate fixed interest through short-term investments that range from one to 12 months. It’s also worth noting that Circle owns SeedInvest, an equity crowdfunding platform.
Let’s see if Circle finally goes public with this new deal. As TechCrunch’s Alex Wilhelm wrote last year, Circle still thinks there’s a lot of growth potential ahead. Rather than betting on historical earnings, the company wants investors to bet on future opportunities.