Odaily Frontline | Bid farewell to P network and OTC, what is Circle going to do?
Odaily Translator: Azuma
Odaily Translator: Azuma
Circle's Transformational Path
Over the past few months, the Boston-based company, which has dabbled in various businesses in the cryptocurrency space, has revealed its transformation through a series of statements.
In October, Circle spun off its cryptocurrency exchange Poloniex; earlier this month, Circle fired about 10 employees; the company's co-founder Sean Neville will step down as co-CEO at the end of December, but will continue to serve as an independent director . On Tuesday, Circle announced the sale of its over-the-counter (OTC) over-the-counter business to Kraken. Commenting on the deal, Circle said: “Circle Trade represents a huge success for the industry and for Circle, and we are excited to see it grow further under the Kraken banner.”
In an interview with The Block after the announcement, Circle co-CEO Jeremy Allaire said rising regulatory pressure in the U.S. was a key factor. The same reasoning applies to the spinoff of Poloniex.
“Market share has been taken away from regulated US players to those overseas who are not regulated,” Allaire claimed.
Allaire did not specify which unregulated crypto firms were eating away at Circle’s market share. However, compliance issues have hit several exchanges over the past two years, forcing the likes of Bitfinex and Binance to stop serving U.S. customers or find other ways to enter the market.
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one articleone articleone articleone articlepoint out that it will focus on this business in the future). Circle said: “Global interest in stablecoins and central bank-backed digital currencies, the introduction of third-generation public blockchains, and increased global interest in crypto-related policies all provide exciting opportunities for our new platform services next year. exciting background."
According to Jeremy Allaire, Circle plans to provide a crypto banking platform-as-a-service for companies that need to interact with the traditional financial system. These services can include cryptocurrency custody, risk and identity management, compliance management, and more.
Allaire told The Block: “The first step (in adopting USDC) is really to focus on payments and provide a seamless experience for businesses that want to be able to easily accept and settle payments with a stablecoin.”
However, it is unclear whether USDC is a big enough cash cow. The supply of USDC has been increasing in recent months, with a total supply of around 470 million. However, there is still a significant gap compared with the $4 billion of the digital stablecoin giant USDT.
An executive from a rival stablecoin company estimated in October that Circle could earn 1.8% to 2.9% from USDC's dollar reserves, which means that the total revenue contributed by USDC business can reach $13.63 million, which is the same as the company's. Its valuation of more than $3 billion in its last public fundraising also pales in comparison.
