Key Data

• Trading Name: Circle
• Legal Entities: Circle Internet Financial, Inc., Circle Internet Financial Europe SAS et al.
  
• Activities: Stablecoin issuer and financial infrastructure provider
  
• Location: Boston (US) et al
  
• Regulations: MiCA, EMI, MSB, Bitlicense
  
• Key People: Jeremy Allaire, Sean Neville, Dante Disparte, Elisabeth Carpenter, Jeremy Fox-Geen
• Latest news: Circle
• Latest update: Aug 23, 2024

Overview

Circle is a leading global financial technology firm that focuses on enabling seamless and secure internet-based payments and financial infrastructure. It is most well-known for issuing USD Coin (USDC), a stablecoin pegged to the US dollar, which has become one of the most widely used stablecoins in the cryptocurrency market. Circle is also the issuer of the Euro-pegged EURC stablecoin.

Financial Situation

Circle has raised well over $600 million in funding to date from prominent investors like BlackRock, Fidelity, Goldman Sachs, and others. This capital has enabled Circle to develop USDC into a leading global stablecoin and expand its financial technology services for businesses worldwide.

In April 2022, Circle announced a $400 million funding round with investments from BlackRock, Fidelity, Marshall Wace and Fin Capital.

Offering

Circle’s core product is the USD Coin (USDC), a fully reserved stablecoin that provides the stability of the US dollar with the advantages of blockchain technology. Circle offers a range of services including:

• USDC Issuance and Redemption: Facilitates the creation and redemption of USDC tokens, ensuring they are always backed 1:1 by US dollar reserves.
• Payment and Treasury Solutions: Provides businesses with tools to accept payments, make payouts, and manage treasury operations using USDC and other digital assets.
• DeFi Integration: Enables seamless interaction with decentralized finance (DeFi) applications, allowing users to lend, borrow, and earn interest on USDC.
• APIs for Developers: Offers a suite of APIs that developers can use to integrate USDC and other blockchain functionalities into their applications.

The USDC Stablecoin

The Circle stablecoin USDC is tied to the US dollar. USDC is designed to maintain a stable price of $1 per token by being fully backed by US dollar-denominated assets held in reserve.

Specifically:

• USDC is a fiat-backed stablecoin, meaning it derives its value from being pegged to the US dollar.
• The majority of USDC’s reserves are invested in short-term US government securities and cash held at regulated financial institutions.
• Circle regularly publishes attestations demonstrating that USDC is 100% backed by cash and cash equivalents.
• USDC can be redeemed 1:1 for US dollars by Circle’s direct customers and businesses.

The value of USDC is directly tied to and backed by the US dollar through its reserve holdings, allowing it to maintain a stable $1 price peg. This makes USDC a useful digital representation of the US dollar for transactions and trading on blockchain networks.

Legal Entities

Circle operates through several legal entities worldwide, including but not limited to:

1. Circle Internet Financial, Inc.: The parent company is headquartered in Boston, Massachusetts, USA.
2. Circle UK Trading Company: A UK-based subsidiary facilitating operations in the European region.
3. Circle Internet Financial Europe SAS: French subsidiary with a MiCA-compliant EMI licese
4. Circle Payments, LLC: Manages payment processing and related services.
5. Circle Digital Ireland Limited: Based in Dublin, this entity focuses on expanding Circle’s operations in the EU.
6. Circle Singapore Pte. Ltd.: Facilitates Circle’s presence in the Asia-Pacific region.

Founders and Key Management

• Jeremy Allaire: Co-founder and CEO Jeremy Allaire is a seasoned entrepreneur and technologist with a background in creating and managing innovative technology companies.
• Sean Neville: Co-founder and former President, Sean Neville has played a critical role in the development and scaling of Circle’s products and services.
• Dante Disparte: Chief Strategy Officer and Head of Global Policy, he oversees Circle’s public policy and regulatory strategy.
• Elisabeth Carpenter: Chief Operating Officer, responsible for operational excellence and strategic initiatives across the company.
• Jeremy Fox-Geen: Chief Financial Officer, overseeing Circle’s financial operations, reporting, and strategic planning.

Licenses and Regulatory Compliance

Circle has secured several licenses and adheres to stringent regulatory standards across multiple jurisdictions to ensure compliance and build trust within the financial ecosystem. Key licenses include:

• BitLicense from New York State Department of Financial Services (NYDFS): Authorizes Circle to engage in virtual currency business activity and operate as a money transmitter in the state of New York.
• E-Money License from the UK Financial Conduct Authority (FCA): Allows Circle to issue electronic money and provide payment services across the United Kingdom and the European Economic Area (EEA).
• Registration as a Money Services Business (MSB) with FinCEN: Ensures compliance with the US Financial Crimes Enforcement Network (FinCEN) regulations, focusing on anti-money laundering (AML) and counter-terrorism financing (CFT).
• MiCA License: As the first stablecoin issuer to receive approval under the EU’s Markets in Crypto-Assets (MiCA) framework, Circle is recognized for its compliance with the latest regulatory standards in the European Union.

Rating Conclusion

Circle is a highly regulated and reputable entity in the digital financial ecosystem, known for its commitment to compliance and transparency. By adhering to global regulatory standards and securing significant licenses, Circle has positioned itself as a trustworthy provider of digital financial solutions and stablecoin issuer. Its robust compliance framework and strategic vision underscore its leadership in the stablecoin and broader fintech space, making it a key player in the future of digital finance.

The company is well-funded and has prominent investors and shareholders.

We include Circle in our Green Compliance and Green Risk lists.