CIRCLE PAYS $400 MILLION IN STOCK — DOLLAR CLAIMS FOR 100 MARKETS
The document is Circle’s Form 8-K, date of report September 4, filed with the September 8 announcement. Item 1.01: a share purchase agreement for Tazapay Pte. Ltd. of Singapore. Consideration “equal to $400,000,000 (as adjusted to account for unpaid indebtedness, Target Company transaction expenses and cash held,” paid in Circle Class A common stock. Five percent of it is held back for indemnities and another three percent on top of that. Circle will also grant “awards of restricted stock units in respect of Circle Common Stock having an aggregate grant date fair value of $25,000,000” to keep the people. Closing needs “no less than 75% of certain identified employees remaining employed,” plus regulators, with an outside date of nine months, stretching to fifteen. No break fee either way.
What Circle is buying, from its own release: a B2B cross-border payments company with “over 100 markets” of local payout rails, “over $25 billion of annualized payment volume,” more than 60 banking and fintech partners, and about 60 percent of that volume already touching stablecoins. Jeremy Allaire: “Stablecoin settlement is becoming core infrastructure in the global economy.” Tazapay’s CEO, Rahul Shinghal: “Circle has the dollar infrastructure in USDC and the regulatory standing to take what we’ve built further than we could alone.”
Read the mechanism, not the press release. A USDC token is a claim on Circle. Under GENIUS, that claim has to be backed one for one by dollars and short Treasury bills. Every payout rail Circle adds in Jakarta or Lagos is a place where someone ends the day holding a dollar claim instead of local money, and behind that claim sits a Treasury bill. This is the thing this desk has been tracking in the stablecoin lane: the rails are being built so the world holds American paper, and the paper is the demand the Treasury needs.
Who profits: Circle, paid in its own stock, and the Treasury, which gets a buyer that never asks the yield. What it costs: the person in one of those 100 markets who now holds a dollar claim that can be frozen by its issuer, as the Justice Department reminded everyone on September 9 when it thanked a stablecoin company for its help.
Bitcoin is not a claim on Circle or on anyone. It settles in the same 100 markets without a payout partner, a retention pool or a reserve of somebody else’s debt. The dollar rails are the story of the decade for the people who issue the dollars. The coin is for the people who would rather not hold their paper.
At the time of this writing, bitcoin was $77,188 at 10:51 AM ET on Crypto.com.