RedotPay Seeks IPO for Stablecoin Payments Firm

Hong Kong-based stablecoin payments firm RedotPay is reportedly planning to go public.

The company is weighing a U.S. initial public offering (IPO) that could raise more than $1 billion, Bloomberg News reported Tuesday (Feb. 24), citing sources familiar with the matter. These sources say RedotPay is working with banks and could seek a valuation of more than $4 billion.

As Bloomberg notes, RedotPay raised $194 million last year, with its Series B round in December valuing the company at more than $1 billion. The company had upwards of 6 million registered users as of November, the report added.

“The pace of adoption by crypto enthusiasts and those who’ve been left out by the traditional banking system shows that we are building something truly impactful,” RedotPay Co-founder and CEO Michael Gao said following the company’s Series A round.

RedotPay also recently formed a partnership with Ripple to extend its cross-border stablecoin payments capabilities.

Gao said at the time that integrating Ripple Payments will expand his company’s tech and address the needs of its users as it focuses on “making digital finance accessible, secure, and efficient for everyone.”

The company’s IPO plans are happening at a moment in which stablecoins are “increasingly being positioned as the best-fit crypto payment mechanism,” as PYMNTS wrote last week.

Instead of replacing cards, that report said, stablecoins are becoming part of card infrastructure as a new source of settlement and funding, letting merchants accept digital assets without ever holding them, leaving that work to card networks and their partners.

Monthly payment flows via such cards have surpassed $1.5 billion, a sign of meaningful consumer usage, while overall crypto-linked card spending has reached roughly $18 billion annualized, indicating migration from more speculative use cases to pure-play retail payments.

“And while those numbers represent a modest amount when compared to global card spend, the mechanics of the emerging crypto-linked card marketplace show that incumbent networks are going on offense, not playing defense,” PYMNTS wrote.

In other stablecoin news, the Securities and Exchange Commission (SEC) recently updated its guidance to allow broker-dealers to apply a 2% capital “haircut” to certain coins when calculating regulatory capital.

“By permitting firms to count roughly 98% of a qualifying stablecoin’s value toward regulatory capital, the SEC has effectively moved these instruments several steps closer to cash and high-quality liquid assets in the hierarchy that governs balance-sheet construction,” PYMNTS wrote Monday (Feb. 23).

“A 100% haircut, after all, makes an asset functionally dead weight. A 2% haircut allows it to behave more like operational cash.”