Crypto Company Circle Prepares for New Products and Global Expansion

Crypto company Circle Internet Financial is counting on its $1 billion cash cushion to weather fresh competition from non-crypto companies such as PayPal Holdings.

Stablecoins are a main focus for Circle, and PayPal introduced a U.S. dollar-pegged stablecoin on Monday (Aug. 7).

The amount of cash Circle has on its balance sheet is more than it had expected and enables the company to be well prepared to make investments, build new products and execute global international expansion, Circle CEO Jeremy Allaire told Bloomberg in a report posted Thursday (Aug. 10).

In one recent addition, the firm debuted Tuesday (Aug. 8) a wallet-as-a-service platform that helps developers embed Web3 wallets in their apps.

The amount of Circle’s USD Coin in circulation has dropped to about $26 billion from $45 billion at the start of the year, according to the report.

Circle had $779 million in revenue in the first half of the year, already surpassing the $772 million for all of 2022, the report said. It also generated $219 million in adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) in the first half, also outpacing the $150 million for all of last year.

The firm has been affected in different ways by the turmoil in the crypto sector, per the report.

“The Terra collapse helped us; the Binance forced-conversion hurt us,” Allaire said in the report. “The FTX collapse sort of helped us, and then the failure of regional banks hurt us.”

Circle has taken the step of hiring Deloitte as an auditor and plans to share financial reports on an ongoing basis, according to the report.

Allaire also said that Circle will not provide white-label solutions, a practice in which companies issue stablecoins under the name of a partner.

Recent news in the crypto space has seen the Federal Reserve release guidance on banks for their digital assets activities, which includes any issuance of stablecoins, the report said. In addition, the House Financial Services Committee advanced a bill to regulate stablecoins. In Europe, stablecoin issuers have been told to start preparing for 2024 European Union rules.

“Companies and entities that can’t meet those standards — those financial integrity standards, those operational, risk management standards — they will not be able to operate,” Allaire said in the report. “My belief is that over the next two years, those players that cannot meet the standards will be crowded out of the mainstream market.”