Feb 18, 2022 - Economy

Stablecoin issuer Circle doubles valuation in new merger deal

Matt Phillips

Illustration: Annelise Capossela/Axios

You don't see this every day: A SPAC buyer just revised a deal with its target company, doubling the latter's valuation.

Driving the news: Stablecoin issuer Circle inked a new merger agreement with Concord Acquisition Corp., the SPAC it agreed to combine with last July. The new deal values Circle at $9 billion — compared to $4.5 billion under the original terms.

Why it matters: The fact that Circle was able to get better terms reflects just how quickly the market for stablecoins has been growing.

Circle says the circulation of its main stablecoin, USDC, has grown to $52.5 billion — more than double what it was when the original deal was announced.
Of note: The deal termination date, April 3, was fast approaching and the merger wasn't on course to close by then, the company said. The new terms mean a fresh clock starts ticking.

What we're watching: The surging growth of stablecoins. The tokens are used as stores of value on crypto trading platforms and are supposed to be redeemable in dollars.

They are attracting the attention of investors as well as regulators, who say such coins could pose a risk to the financial system, and potentially the economy.

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Stablecoin issuer Circle doubles valuation in new merger deal

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