Circle is aiming to become the second-largest crypto-focused company to go public in the U.S.
The firm has filed a prospectus with the SEC, marking a major step after abandoning a previous public listing attempt during the last bull market. This move comes as the regulatory climate improves under the Trump administration.
However, Circle’s financials reveal challenges. The company’s net income for 2024 was $155.7 million, down from $267.6 million the previous year, despite recovering from a significant loss in 2022. In comparison, Tether reported $13 billion in profits, mainly from U.S. Treasury yields.
Experts suggest Circle’s reduced profitability could be linked to high operational expenses tied to regulatory compliance, unlike Tether’s more decentralized approach.
One major cost factor is Circle’s partnership with Coinbase, which required a $908 million payment in 2024 to facilitate USDC circulation. Analysts argue that despite the partnership, Circle lacks a unique edge in the stablecoin space, especially compared to companies like PayPal, which can leverage its existing user base for distribution.
Circle’s strategy also heavily relies on regulatory positioning. As stablecoins become more mainstream, Circle’s focus on compliance and lobbying could help secure its place in the market. Recent legislation, like the GENIUS Act, could streamline regulation for larger stablecoins, providing clarity and fostering innovation.
Circle’s challenge lies in balancing expansion with financial stability. While the IPO could boost its presence, sustaining profitability amidst high compliance costs and market competition remains uncertain.
Digital banking platform SoFi Technologies is making a strong return to the cryptocurrency space, relaunching its crypto trading and blockchain services after stepping away from the sector in late 2023.
Digital assets are gaining ground in corporate finance strategies, as more publicly traded companies embrace cryptocurrencies for treasury diversification.
Ripple has been dealt another legal blow after a federal judge rejected its attempt to ease court-imposed restrictions and penalties stemming from its long-standing battle with the U.S. Securities and Exchange Commission (SEC).
Stablecoins are failing where it matters most, says the Bank for International Settlements (BIS), which sharply criticized the asset class in its latest annual report.