Stablecoins can give cryptocurrency markets the stability of fiat currencies with the transaction speed of digital currencies. Circle, the company behind stablecoin USDC, is finding opportunities to further the exposure of its stablecoin with a recent merger.
According to a CNBC report, Circle is moving forward with a blank-check company Concord Acquisition Corp merger. Both companies were looking to merge last summer when Circle was $4.5 billion, but its new valuation will double that after the merger.
Of course, one obstacle is the Securities and Exchange Commission (SEC) with any digital asset these days. Of course, they’re the same folks that blocked the introduction of a bitcoin futures exchange-traded fund (ETF) until it finally became a reality last year.
In the CNBC report, Circle CEO Jeremy Allaire mentioned the painstaking process of getting approval from the SEC. A new agreement now allocates enough time to complete the merger with Concord Acquisition Corp.
“We have an SEC qualification process that we’re going through, we’ve been through multiple rounds of comments on that, and that’s just taking longer,” Allaire said.
“The SEC is doing its job,” Allaire added. “There’s a lot of inherent risk in this space… as a company that wants to be trusted, transparent, and accountable, being a public company really helps with that. But also, going through the rigor of SEC review is a key part of that.”
Stablecoins Under Fire?
Despite their ability to mimic the behavior of fiat currencies, federal regulators aren’t cutting them any slack from other cryptocurrencies like Bitcoin. Increased demand for stablecoins is causing the federal government to take a closer look at them since they fall under the umbrella of digital assets.
Nonetheless, the Federal Reserve looks like it might be willing to work with stablecoins more. A CoinDesk article noted that the Federal Reserve Bank of New York published a study on the potential impact stablecoins would have on the existing banking structure.
“If stablecoins were to see broad adoption throughout the financial system, they could have a significant impact on the balance sheets of financial institutions,” New York Fed researchers wrote.
“With appropriate safeguards and regulations, stablecoins have the potential to provide a level of stability that is on par with traditional forms of safe value,” the paper stated.
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