Circle's $1.1 billion IPO shows Wall Street is taking stablecoin seriously

By Steve GelsiThe cryptocurrency company, which offers fully-backed digital money for rapid global payments around the clock, priced its IPO above the expected rangeStablecoin issuer Circle Internet Group Inc. is going public Thursday, after its IPO priced above its estimated range and additional shares were sold, in a sign that Wall Street is taking digital currencies more seriously.As a specialist in global payments and 24/7 financial markets, Circle is raising money to help widen the use of its USDC digital currency, which is redeemable one-for-one with the U.S. dollar.The frenzied investor interest in Circle's IPO, which has reportedly been oversubscribed, comes after bitcoin recently reached a record high above $110,000, and as the cryptocurrency market becomes more legitimate with crypto broker Coinbase Inc. (COIN) entering the S&P 500 index SPX in May.Circle (CRCL) raised nearly $1.1 billion by selling 34 million shares at $31 each, through lead underwriters J.P. Morgan, Citigroup and Goldman Sachs.The stock will start trading on the New York Stock Exchange under the symbol "CRCL."Bankers for Circle's IPO increased the amount of stock in the IPO from a previously upsized 32 million shares and above its already-upped price range of $27 to $28 a share.At its IPO price of $31 a share, Circle would have a market capitalization of about $7 billion, based on 225.34 million shares outstanding, if underwriters exercise their option to buy additional shares.That's about 4.2 times its 2024 revenue of $1.68 billion.Circle generated $64.79 million in net income on revenue of $578.57 million in the three months ended March 31, up from net income of $48.64 million on revenue of $365.09 million in the year-ago quarter.Cathie Wood's Ark Invest has indicated an interest in buying up to $150 million of Circle's stock at its IPO price.The IPO comes as Congress has been working on a bill to promote cryptocurrencies.Circle is the issuer of the USDC, a cryptocurrency pegged to the U.S. dollar.Also read: New crypto bill could turbocharge the stablecoin industry: 4 changes it might bringSince its launch seven years ago, USDC has been used for more than $25 trillion in on-chain transactions as of March 31, including about $6 trillion in the first quarter, the company said in its IPO prospectus.As of May 23, more than $61 billion of USDC was in circulation."Thousands of companies and developers have integrated with USDC, creating a thriving ecosystem," the company said. "Major payments companies, enterprise technology firms, consumer internet applications, financial technology firms, and digital asset companies use Circle technology to power solutions built on USDC."The purpose of the USDC digital currency is to speed up transactions through a regulated digital currency that offers near-instant settlement worldwide at any time.Uncertainties remain in the cryptocurrency world, which will be affected by the bill working its way through Congress.In 2023, the USDC faced an extended period of circulation decline due to an increase in U.S. short-term interest rates, a decline in digital asset prices, and an associated decline in leverage in the digital asset trading ecosystem, the company said."We will no doubt continue to face challenges in the future," the company said. "Nonetheless, the growth of USDC and the Circle stable coin network has shown resilience and allowed us to become a strong and thriving business in a short period of time."-Steve GelsiThis content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.