Circle Introduces Zero Fee USDC Minting Through Circle Mint, IPO Looks Rocky

In a major announcement on Tuesday, November 14, USDC-stablecoin issuer Circle introduced its zero-fee minting facility dubbed Circle Mint. Currently, Circle will be launching this facility only in Singapore since it secured the Major Payments Institution (MPI) license from the MAS.

About the Circle Mint Facility

In a strategic move to ensure compliance and reliability for its customers in Singapore, Circle Mint Singapore announces its commitment to adhere to the Monetary Authority of Singapore (MAS) regulations. With this, Circle is also positioning itself as a trusted gateway to the world of digital currencies.

For Singapore-registered entities, Circle Mint Singapore offers a suite of benefits such as:

1. No Minting Fees: Customers can enjoy the advantage of zero fees for minting or redeeming USDC. This eliminates added risks, extra fees, and long transaction times often associated with brokers and resellers.

2. Instant Availability: Fiat funds from users’ bank accounts can be swiftly and automatically converted to USDC, contingent on participating banks’ instant settlement networks. Additionally, Circle Mint Singapore also has plans to expand access to regional banking rails for near-instant settlement in the future, facilitating seamless transactions.

3. Compliance with MAS Regulations: Circle Mint Singapore is meticulously designed to align seamlessly with MAS regulations. This also ensures that financial activities are conducted efficiently and securely within the framework of regulatory guidelines.

As the adoption of digital currencies continues to gain momentum in the Asia Pacific region, Circle Mint Singapore’s initiatives play a crucial role in making digital currencies more accessible for businesses in this dynamic market.

IPO Could be A Hard Sell

As we know, Circle is also preparing for its public listing through an IPO in early 2024. However, this is going to be a daunting task for Circle chief Jeremy Allaire since the USDC stablecoin has been losing market share.

Crypto industry leaders and investors identify multiple factors contributing to the decline in market share, presenting challenges that may not have swift solutions for Allaire. As he refines his presentation to attract investors, USDC’s portion of the $126 billion stablecoin market has fallen to under 19%, a significant drop from its position when Circle, backed by Goldman Sachs Group Inc., abandoned its IPO aspirations in December, aiming for a valuation around $9 billion. Chris Taylor, head of crypto at trading firm GSA Capital said:

“You want to stick some growth expectation in there, and most people think that growth expectation is negative. It’s still worth something, but it’s a tough sell.”

Circle’s strong connections with the US banking system have inflicted various challenges on the company. The collapse of Silicon Valley Bank in March, where Circle held its USDC reserves resulted in a destabilizing run on the stablecoin, causing it to deviate from its peg to the US dollar for an extended period.

Although Circle successfully retrieved funds stranded at SVB within days, the incident negatively impacted its reputation. Subsequently, USDC’s circulation witnessed a significant drop of over $10 billion in a month and has continued to decline. Following the events, market makers had a lack of trust in using USDC.