- USDC issuer Circle is relocating from Ireland to the US.
- The company has not disclosed the reason behind its move.
- All indications suggest that its potential IPO is a driving factor.
Circle, the issuer of the industry’s second-largest stablecoin, USDC, is planning to shift its legal base to the US from its current home of Ireland. The move will see the company depart from low corporate levies in favor of navigating more onerous taxes and a murky regulatory infrastructure, and here’s why.
Circle Sets the Stage for an IPO
A company spokesperson confirmed to multiple publications that Circle’s parent company has initiated the necessary paperwork with the High Court of the Republic of Ireland to redomicile its firm, though the specific reason remains undisclosed.
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Circle’s decision to relocate to the US could be influenced by its potential initial public offering (IPO), for which the company confidentially filed for its equity securities in January of this year. However, aside from the IPO, the move could appear less appealing due to the US’s complex regulatory landscape and high tax rates, contrasting Ireland’s lucrative corporate tax environment.
Earlier this year, Circle announced that it had submitted a draft registration statement S-1 form to the SEC as part of its efforts to go public. Share quantity and pricing details are yet to be finalized, pending SEC review, and are subject to market and other conditions.
Circle’s decision to redomicile could indicate positive feedback on its IPO application from the SEC, suggesting progress in the company’s journey towards becoming a publicly traded entity and closing the gap on its main competitor.
Circle to Break Out of Tether’s Shadow?
Circle has long operated in the shadow of its main rival, Tether, which boasts a market capitalization of over $111 billion, far surpassing the former’s $33 billion.
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While USDC has demonstrated exceptional performance over the past year, frequently flipping USDT in monthly transactions, an IPO could propel Circle much closer to Tether. If Circle successfully navigates the intricate process and stringent requirements of becoming a publicly traded company, it could gain favor among institutional investors and become ‘Wall Street’s stablecoin.’
This is particularly significant as Tether navigates turbulent waters, after regulators implicated the issuer in numerous money laundering and terror financing instances.
On the Flipside
- In 2021, Circle tried to go public through a merger with Concord Acquisition Corp.; however, that arrangement didn’t see the light of day.
- Circle’s biggest competitor, Tether, is based in the British Virgin Islands.
Why This Matters
The United States may not seem the most appealing choice for major crypto companies seeking relocation, especially in light of the regulatory crackdown on the industry. Transitioning from a more crypto-friendly jurisdiction to the US might raise some eyebrows. However, this move holds significant importance for Circle and could position USDC in closer competition with Tether as the latter endeavors to restore its reputation.
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