Crypto Stablecoin Issuer Circle To Relocate To US Amid Market Rebound

Circle Internet Financial, the company behind the world’s second-largest stablecoin (CRYPTO: USDC), is set to move its headquarters from Ireland to the United States.

What Happened: While the specific reason for the move remains undisclosed, the company confirmed the filing of legal paperwork to facilitate the relocation, Bloomberg reported.

This news comes as the broader cryptocurrency market experiences a resurgence, with USDC’s circulation rebounding from a low of $24 billion earlier this year to its current value of $33 billion.

This recovery mirrors the positive trend in the crypto space overall.

Shifting its legal base to the U.S. could expose Circle to higher taxes compared to Ireland’s historically low corporate tax rates, which have attracted major corporations like Apple and Pfizer.

However, recent reforms by the Organization for Economic Cooperation and Development (OECD) introducing a minimum 15% tax on the profits of large multinationals are diminishing Ireland’s tax advantages.

Circle’s core business revolves around USDC, a stablecoin with a market capitalization of $33 billion. USDC’s circulation peaked at approximately $56 billion in June 2022 but faced a significant decline last year due to U.S. banking issues, including the collapse of Silicon Valley Bank, where part of USDC’s reserves were held.

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Despite these challenges, USDC’s circulation has rebounded to $24 billion this year, aligned with a general recovery in the cryptocurrency markets.

Stablecoins, which are typically pegged 1-1 to fiat currencies and backed by reserves of cash and bonds, have seen increased profitability due to the post-pandemic rise in interest rates.

For example, Tether Holdings Ltd., the operator of the largest stablecoin (CRYPTO: USDT), reported a record first-quarter profit of $4.5 billion.

Circle enjoys substantial backing from prominent Wall Street firms such as Goldman Sachs, General Catalyst Partners, BlackRock, Fidelity Management and Research and Marshall Wace, along with cryptocurrency-focused companies like Coinbase Global Inc.

What’s Next: The strategic relocation of Circle’s legal base and its broader implications for the cryptocurrency industry will be a key topic of discussion at Benzinga’s Future of Digital Assets event on Nov. 19.

Industry leaders and experts will delve into the evolving regulatory landscape and its impact on digital finance and stablecoin issuers like Circle.

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