Cryptocurrency firm Circle to float in US in $4.5bn merger deal

Circle, the company behind digital currency USD Coin, is to float in the US in a $4.5bn (£3.27bn) merger deal with a company chaired by former Barclays chief executive Bob Diamond.

© Provided by The Guardian Photograph: Stefan Wermuth/REUTERS

It will merge with Concord Acquisition Corp, which is chaired by Diamond, with the combined business to be taken over by a newly formed Irish holding company that will then list on the New York Stock Exchange.

The deal with Concord – a special purpose acquisition vehicle (Spac), also known as a “blank cheque” shell company that raises money first and seeks businesses to buy later – gives Circle an enterprise value of $4.5bn.

Circle runs USD Coin, a so-called stablecoin pegged to the US dollar used for digital transactions, and has backed $785bn in deals recorded on its blockchain.

“Circle is the true pioneer of trusted digital currencies, an increasingly critical part of the global financial system,” said Diamond, who will join the board of the new company, which will trade under the ticker CRCL.

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Circle, which launched in the UK with the backing of Diamond’s former employer Barclays in 2016, is the latest firm in the world of cryptocurrencies to seek to float on the stock market.

In April, Coinbase, the US’s largest cryptocurrency exchange, floated on the Nasdaq stock exchange. Bakkt, a platform majority owned by Intercontinental Exchange, is also planning to list after a deal with Victory Park Capital.

The number of UK adults who hold cryptocurrencies such as bitcoin has risen to 2.3 million, despite warnings from the Financial Conduct Authority and Andrew Bailey, the governor of the Bank of England, that people should be prepared to potentially lose all their money.

Circle co-founder Jeremy Allaire, who previously launched online video platform Brightcove, promised that the move to go public is a “critical step in providing greater transparency”.

“As part of our transformation from private to public company, that also creates an opportunity for Circle to also provide significantly more transparency about the business we are building … and about the reserves that back USDC [USD Coin],” he said on Twitter. “Circle intends to become the most public and transparent operator of full-reserve stablecoins in the market today.”

Earlier this year a federal court in Massachusetts authorised the US Internal Revenue Service to serve summons to Circle, seeking information about US taxpayers who conducted transactions of at least $20,000 in cryptocurrency during 2016 to 2020. Circle has not been accused of any wrongdoing.

Under the terms of Circle’s flotation, institutional investors Marshall Wace, Fidelity, Daniel Loeb’s Third Point and Ark Investment Management have committed $415m of capital, while Diamond’s Concord will inject $276m, mostly from its own flotation in December.

© Photograph: Stefan Wermuth/REUTERS Circle launched in the UK with the backing of Bob Diamond’s former employer Barclays in 2016.