Stablecoin issuer Circle to make US legal home ahead of listing

CIRCLE Internet Financial, issuer of crypto’s second-largest stablecoin, plans to shift its legal base to the US from the Republic of Ireland.

A company spokesperson confirmed on Tuesday (May 14) that court paperwork was recently filed to re-domicile but declined to say why. Circle in January confidentially submitted plans to the US securities regulator for an initial public offering.

Circle may face more onerous US taxes under the shift. Ireland’s relatively low corporate levies wooed the likes of Apple and Pfizer, but some of that advantage is being eroded by Organization for Economic Cooperation and Development reforms that impose a minimum 15 per cent tax on the profits of bigger multinationals.

Circle’s business is built around USDC, a US$33 billion stablecoin. The token’s circulation hit a peak of about US$56 billion in June 2022 before tumbling last year after Circle was buffeted by US banking woes, having parked part of the stablecoin’s reserves with ill-fated lender Silicon Valley Bank.

USDC’s circulation has recovered from a recent low point of US$24 billion this year, coinciding with a broader rally in crypto markets.

A stablecoin is typically pegged 1-1 to fiat currency and backed by reserves of cash and bonds. The post-pandemic jump in interest rates has boosted the profitability of issuers. For instance, Tether Holdings, operator of the largest stablecoin, said it posted a record first-quarter profit of US$4.5 billion.

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Circle is backed by Wall Street heavyweights including Goldman Sachs Group, General Catalyst Partners, BlackRock, Fidelity Management and Research and Marshall Wace, as well as crypto-native outfits such as Coinbase Global. BLOOMBERG