Investing.com -- Stablecoins have offered stability in the eye of numerous crypto-storms, but with trading volumes now rivaling and even surpassing existing payment networks including PayPal (NASDAQ:PYPL), could Circle's upcoming IPO later this month help stablecoins muscle their way to the top of mainstream payments?
Circle IPO Puts Stablecoins in Spotlight
Circle, the second-largest stablecoin issue with its USDC stablecoin, which has $60 billion market cap, has filed for an initial public offering in the U.S., a move Macquarie analysts believes could represent a "milestone in the crypto space."
This isn't the first time that Circle has eyed a move to the public markets after botched attempt to go public via a special purpose acquisition company, or SPAC, in late 2022.
The stablecoin issuer, however, now faces a far more favorable crypto landscape as the Trump administration has sought to the regulatory uncertainty that stifle innovation and growth in the industry.
Circle's Big Bet: Will Stablecoins Overtake Mainstream Money
The stability of stablecoins, -- digital assets designed to maintain a stable value, typically pegged to a traditional currency like the U.S. dollar -- have made this technology a mainstay across crypto trading and decentralized finance, where the need is high for a stable medium for trading and lending activities.
The Circle IPO, however, has the potential to boost stablecoin adoption and disrupt payment infrastructure, offering "faster, less expensive ways to transact," the analysts said.
"Circle's public market entry could help fund acceleration in the evolution of payment infrastructure and acceptance, and cross-border transfers, to enable a faster, more cost-effective global transfer regime," Macquarie said in its Crypto Chronicle report.
Stablecoins, which have grown to represent over $260 billion in total market cap, are increasingly seen as a critical part of the financial ecosystem due to their utility, price stability, and rapid transaction speeds. Circle’s USDC, specifically, has outpaced market leader Tether in year-to-date growth, with USDC growing 35% versus Tether’s 4%.
Circle clinched partnerships with major payment networks, including Visa (NYSE:V), to offer faster merchant settlements via blockchain technology. The issuer’s API and SDK integrations also aim to expand use cases for stablecoins, making them more accessible for businesses seeking instant, low-cost payment options. This, Macquarie argued, positions Circle to help "redefine payment infrastructure as we know it."
Circle IPO: Not Without Its Risks
Despite the optimism, Macquarie flagged risks in Circle’s financials. The company recorded $1.7 billion in revenue in 2024 but saw a 28% decline in adjusted EBITDA to $285 million. Still, the analysts maintained a constructive outlook, emphasizing a "long runway for growth around the demand for tokenized dollars and payments infrastructure."
The Road to Mainstream Is Paved With Competition
Making a big dent in existing payment infrastructure isn't easy as stablecoins face growing competition from other payment systems. But this new technology is already prizing away transaction volumes from some existing incumbents such as PayPal, Visa, and Mastercard (NYSE:MA), illustrating the potential of stablecoins to disintermediate legacy infrastructure.
Stablecoins reached a total transfer volume of $27.6 trillion, exceeding the combined volume of Visa and Mastercard transactions in 2024.
But for this potential to be fulfilled, stablecoins need the right mix of capital and demand.
"Token issuers must have access to sufficient capital, grow consumer and institutional confidence, and offer functionalities appealing to mainstream users," the analysts said.
Still, Circle's IPO marks the first step for stablecoins to move out of the crypto shadows as it signals strong institutional interest in blockchain-based payment systems and reflects the growing need for innovation in cross-border transactions and faster payments.