Circle is entering the Hong Kong market to drive the adoption of USDC among retail and institutional investors.
By Godfrey Benjamin
Edited by Julia Sakovich
Updated
3 mins read
Circle, the issuer of the second-largest stablecoin USDC, plans to expand its business to Asia. Specifically, the firm is eyeing Hong Kong as its potential market for making its Asian crypto hub. This comes as it prepares for its Initial Public Offering (IPO) debut in the United States. Instead of these expansion plans, Circle has started growing its workforce and business presence there.
The stablecoin issuer is awaiting the release of the regulatory framework for stablecoin in Hong Kong. Before setting out, Circle plans to obtain a local license from the appropriate authority to avoid disrupting its services and operations. Circle views Hong Kong as a stable, coin-friendly nation that provides a significant advantage for development.
It lauded the Asian country’s atmosphere for stablecoin to thrive, including the same-day USD settlement. Once in Hong Kong, Circle would have to compete for market share with Chinese e-commerce giant JD.com, which already has an HKD stablecoin in the market. On the brighter side, it stands to benefit from Hong Kong’s status as an ideal hub for stablecoin innovation and growth.
In the past two years, this country has introduced several pro-crypto measures and welcomed the launch of spot Bitcoin and spot Ether ETFs in the region. During last week’s annual Fintech Week event, Hong Kong’s Securities and Futures Commission (SFC) announced plans to license more cryptocurrency exchanges by the end of 2024.
The SFC’s Executive Director for Intermediaries, Eric Yip, announced while highlighting the city’s ongoing regulatory efforts. As it stands, the commission works closely with applicants and offers feedback. This has led many exchanges to dedicate enough resources to ensure full compliance with regulatory standards. With its digital-asset licensing framework launched in June 2023, Hong Kong has opened the doors for retail crypto trading on licensed platforms.
Although its spot Bitcoin ETFs have not performed as well as their counterparts in the US in terms of demand, there is still strong regulatory acceptance for crypto investment products.
Meanwhile, Circle’s IPO has been in the works for a very long time. Based on their initial plan, the offering should have gone live in early 2024, but did not due to regulatory hurdles. Many market watchers disregarded the possibility of the IPO, judging by the fact that Circle had attempted a Special Purpose Acquisition Company (SPAC) deal earlier.
By January, the stablecoin issuer submitted its draft registration statement for the IPO to the Securities and Exchange Commission (SEC). This signaled the company’s ambition to bring innovative blockchain-based financial services to a broader audience and reflected its interest in capitalizing on the growing interest in digital assets. Since then, Circle has been waiting for the SEC to conclude its review.
Speaking to Bloomberg, the firm’s CEO Jeremy Allaire confirmed that the IPO plan is still on. “We’re in a financially strong position and have been able to build a very solid business, and we’re currently not seeking any funding,” he added.
Disclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article aims to deliver accurate and timely information but should not be taken as financial or investment advice. Since market conditions can change rapidly, we encourage you to verify information on your own and consult with a professional before making any decisions based on this content.
Benjamin Godfrey is a blockchain enthusiast and journalist who relishes writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desire to educate people about cryptocurrencies inspires his contributions to renowned blockchain media and sites.
