Last week, it was the news Thursday (May 22) that J.P. Morgan Chase, Bank of America, Wells Fargo and Citigroup are exploring the launch of a jointly operated stablecoin.
This week, it is the news Tuesday (May 27) that Circle, the issuer of the USDC stablecoin, filed for an initial public offering (IPO) on the New York Stock Exchange under the ticker symbol “CRCL.” Circle is hoping for a valuation of $5.65 billion with an offering price target of $24 to $26 per share. The lead underwriters are J.P. Morgan, Citigroup and Goldman Sachs.
Circle is betting that the credibility conferred by becoming a public company will help the company in a financial environment skeptical of opaque crypto firms. Transparency is a key pillar of Circle’s pitch to institutional clients as outlined in its S-1 filing with the Securities and Exchange Commission. By going public, Circle will subject itself to the scrutiny of U.S. securities laws, quarterly earnings reports and regulatory disclosures, all elements designed to engender trust from risk-averse enterprises, banks and governments.
Circle’s goal for its IPO is to position itself favorably to become the financial utility layer of the internet. Think Amazon Web Services (AWS) for money movement or a SWIFT network reimagined for digital assets.
To get there, Circle may need to evolve beyond being a stablecoin issuer. Elements such as programmable money services, secure identity layers, robust compliance automation and user-friendly APIs could be crucial since institutional trust is hard-won and easily lost.
See also: Keeping Stablecoins Stable is Complicated: Why CFOs Need to Pay Attention
Stablecoin Competition Is Getting Crowded
The stablecoin arena is no longer the wild frontier it once was. Circle must now contend with legacy finance and FinTech upstarts. PayPal launched PYUSD, and traditional banking consortia are mulling their own. Tether remains the volume leader globally, especially outside the United States.
Circle’s edge lies in its U.S.-compliant stance and focus on transparency and fiat backing. But whether that will be enough to ward off better capitalized or more broadly distributed competitors is uncertain. The potential IPO valuation and capital war chest may help, but only if Circle is able to move quickly to entrench itself as the preferred partner for enterprises.
Circle’s S-1 offers insight into its revenue model, revealing an interest-sensitive business. In 2024, the company earned $1.68 billion in total revenue, with 99% of that coming from interest income on reserves backing USDC. That figure underscores how tightly Circle’s fortunes could be tied to interest rate policy.
As a practical matter, Circle earns this income by parking USDC reserves in short-term U.S. Treasury securities and overnight reverse repurchase agreements. The downside is that if interest rates fall, so too does Circle’s revenue. According to its filing, a 1% drop in rates could slash income by as much as $441 million.
Stablecoins have started to decouple themselves from crypto exchanges and position themselves as a component of real-world financial infrastructure, PYMNTS reported in March. Additionally, stablecoin market capitalization reached an all-time high amid strong performance across crypto sectors in April.
Read also: Smaller Banks Face Urgent Crypto Decisions
Regulation Remains Crypto’s Looming Wildcard
Circle’s IPO plans can also be seen as a part of a broader movement among other major crypto firms seeking to capitalize on a more pro-crypto, pro-business regulatory climate under the President Donald Trump administration.
The SEC, for example, said it is eying regulatory changes to accommodate on-chain securities and other crypto assets. Meanwhile, the Guiding and Establishing National Innovation for U.S. Stablecoins of 2025 (GENIUS) Act, the country’s first stablecoin legislation, is proceeding through the Senate amid recognition in Washington that stablecoins are too big to ignore.
Still, the GENIUS Act could include a provision prohibiting interest-bearing stablecoins. The Circle S-1 flags multiple legal risks, but chief among them is the uncertain U.S. regulatory environment for stablecoins.
To diversify its business model, Circle this month brought the Circle Payments Network (CPN) live. Designed to facilitate the use of stablecoins for mainstream cross-border payments, the network and coordination protocol enables financial institutions to exchange payment instructions and settle transactions on open, public blockchains.
Early adopters of CPN include Alfred Pay, which is using the network to enable stablecoin-to-fiat offramps via PIX and SPEI; Tazapay, which is using it to support compliant fiat disbursements into Hong Kong; RedotPay, which is using the network to initiate USDC-based payments into Brazil; and Conduit, which is using it to onramp fiat into USDC in the U.S. and Europe to support B2B flows into Mexico.
