As an analyst with a background in taxation and finance, I find Circle’s decision to move its legal operations from Ireland to the United States intriguing. While Ireland’s 12.5% tax rate is attractive to many companies, Circle seems poised for a significant shift.
Circle Internet Financial Ltd, a company responsible for issuing stablecoins, intends to relocate its legal jurisdiction from the Republic of Ireland to the United States.
Based on a Bloomberg article, the firm submitted an application for re-domiciling on Tuesday, a fact confirmed by a company representative. Yet, this representative declined to provide any explanation for this move.
Circle Moving Legal Operations to the US May Be Costly
It’s intriguing that Circle has opted to relocate its legal headquarters to the United States. This move could potentially lead to higher taxes for the company. Ireland’s corporate tax rate is just 12.5%, making it an alluring choice for numerous businesses seeking to minimize their tax liabilities in Europe. Thus, Circle’s departure from this perceived tax haven to the US is noteworthy for the stablecoin issuer.
Circle’s decision to go public is intriguing, as they have recently filed for an initial public offering (IPO) with the U.S. Securities and Exchange Commission (SEC). A preliminary confidential filing in January signaled their intent to do so, but details such as the price range and number of shares to be sold to the public were not disclosed. The timing of Circle’s IPO launch depends on how the SEC review process unfolds.
As an analyst, I’ve discovered that Circle’s January SEC filing isn’t its inaugural attempt at an initial public offering (IPO). Previously, the company had pursued a special purpose acquisition company (SPAC) merger with Concord Acquisition Corp. In July 2021, Circle announced this potential deal, later amending terms in February 2022 and doubling the earlier valuation to $9 billion. However, the crypto winter and bear market in 2022 might have influenced Circle’s decision to abandon the deal. At that time, CEO Jeremy Allaire mentioned that “the proposed transaction timed out,” implying that Circle didn’t manage to fulfill the SEC’s requirements within the given deadline. Nevertheless, Allaire emphasized that “becoming a public company remains part of Circle’s strategic plan to boost trust and transparency, which has never been more crucial.”
USDC Metrics on the Rise
In contrast to USDT’s undisputed reign in the stablecoin sector, USDC’s transaction volume reached an impressive $456 billion during the third week of April, according to Visa and Allium Labs’ adjusted metric. Meanwhile, Tether recorded only $89 billion since the beginning of the year. Furthermore, the data indicates a substantial growth in USDC’s market share.
As a crypto investor, I believe one potential factor contributing to the rise in value could be the strategic partnership between Circle and Stripe last year. With Stripe processing over a trillion dollars in transactions annually, this collaboration poses a significant challenge to USD Tether (USDT).
Circularly, Visa Inc, BlackRock Inc, and MoneyGram are among Circle’s collaborators. In addition, the company aims to expand digital dollar reach in Brazil and Japan through alliances with Nubank and SBI Holdings, respectively.
In February, USDC’s value reached a staggering $28.5 billion according to CoinGecko data, up from $24.4 billion on December 1, 2023. This represented a noteworthy growth of 14.3% over a three-month period. Conversely, USDT saw its value climb to $98 billion from $89 billion during the same timeframe, marking a notable increase of 9%.
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2024-05-15 13:42