Hi! Ed here.

It’s been 25 years since investors have seen an IPO like Circle’s boffo debut.

In seven trading days, Circle’s stock has soared 93% from its opening price, and 330% from its listing price. It’s a gaudy performance that feels like the dotcom boom during web 1.0.

Yet Circle’s hot start doesn’t just stem from optimism around stablecoins. It’s also testament to the company’s core strategy — complying with financial regulation. 

Who would have thought that playing nice with governments, especially in an industry as resistant to oversight as crypto, would pay off so handsomely?

From the get go, CEO Jeremy Allaire opted to make Circle, which issues the USDC stablecoin, behave like other financial institutions.

Unlike Tether, Circle embraced the European Union’s Markets in Crypto-Assets regulatory regime, or MiCA, even though Allaire wasn’t shy about critiquing provisions he deemed unwise.

And unlike Binance, Circle had no problem with designating a global corporate headquarters like a normal company — it’s based in the One World Trade Center tower just off Wall Street in New York.

So when the US Congress this year considered two bills that would bring much needed clarity to the dos and don’ts in stablecoins, Circle was sitting pretty. 

It was primed to make an already compliant USDC available to banks, payment processors, and other companies eager to tap the innovation once a bill is passed.

Indeed, Circle touted its bona fides right at the top of its stock offering filing with the Securities and Exchange Commission.

“We take pride in our regulatory-first posture in which we prioritise compliance,” the company stated.  

Taken on its own, this position is rather meh. It’s what any company poised to list on a stock exchange might say. 

In the context of crypto, especially after the conflicts with the Biden administration, this amounts to a rather unorthodox stance. 

Circle was eager to become a go-to partner for traditional finance in its bid to close the gap with Tether, the market leader in US dollar-backed stablecoins. 

With $155 billion worth of USDT in circulation, Tether is more than twice the size of Circle. 

Even so, investors are betting that the advent of a landmark US stablecoin law will be a game changer for the industry, and Circle will emerge a big winner. 

Bullish signs abound. 

Just last week, Stripe, the payments processor, acquired Privy, a crypto wallet provider, in preparation for providing their use to customers. And venture capitalists are ploughing record investments into crypto startups.

Deals and IPOs and buzzing VCs? That is a very ‘90s vibe, indeed.

ICYMI

• Why Stripe’s crypto wallet deal is huge for stablecoin payments
  Stripe’s acquisition of Privy is fuelling excitement about mainstream crypto adoption.

• Ripple-SEC case nears finish line. Crypto attorney sees 70% chance, says judge ‘wants more’

  After nearly five years of litigation, Ripple and the US Securities and Exchange Commission want to settle. But they still have to convince the judge to rewrite her own judgment.

Story of the Week

Crypto critics blast Coinbase’s ‘gross’ sponsorship of US Army parade

Coinbase is facing widespread backlash over its decision to sponsor the US army’s 250th anniversary military parade, which took place in the Capitol on Saturday in conjunction with President Donald Trump’s own birthday.

Post of the Week

Roman Storm, a co-founder and dev at Tornado Cash, is poised to to trial in July on US charges he helped launder illicit funds from crypto hacks on the anonymising platform. He argues that holding him responsible for the functions of smart contracts is wrong, and threatens financial privacy. Last week, the Ethereum Foundation contributed $500,000 to his defence.

DL News is an independent news organisation that provides original, in-depth reporting on the largely misunderstood world of cryptocurrency and decentralised finance. From original stories to investigations, our journalism is accurate, honest and responsible.

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