(Bloomberg) -- Circle, the principal operator of the second-biggest stablecoin, sees potential growth with corporate balance sheets as it broadens its geographic footprint and product offerings.

The Boston-based internet finance firm is establishing a regional headquarters in Singapore and has announced it’s investing in a Japanese yen stablecoin effort through the newly-established Circle Ventures. Circle sees ample opportunity in Asian markets, Chief Executive Officer Jeremy Allaire said in an interview. He expects significant growth in the use of stablecoins, the top two of which are Circle’s USDC and category leader Tether, in borrowing and lending markets.

“Especially in the inflation environment we’re in and the search for yield, this is going to be a big, big theme,” Allaire said via a video call. “While a lot of people want to focus on people hedging by buying Bitcoin directly, we think for stewards of capital within corporations and corporate treasurers and so on, that an allocation into stablecoin yield is actually going to be really, really attractive.” The company is rolling out its interest-yielding product, Circle Yield, more broadly and making it a strategic focus.

Stablecoins are growing quickly along with the broader cryptocurrency space -- USDC’s market value is now about $35 billion, compared with $3.7 billion at the end of last year. This rapid expansion paired with the premise of stablecoins typically being pegged to a fiat currency like the U.S. dollar have also attracted the attention of regulators.

The U.S. Securities and Exchange Commission is getting a pathway to rein in stablecoins and the international Financial Stability Board issued a report last month on oversight of the assets. Regulators, particularly in the U.S., have also expressed concern about crypto yield products. Circle has disclosed that it received a subpoena from the SEC in July.

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Other things Allaire said in the interview:

  • On the Singapore regional headquarters: “We’re hiring people now, we’ll end up hiring quite a few people over time,” and Circle aims “to be one of the first global stablecoins to be licensed in Singapore.” The company is also collaborating with the Monetary Authority of Singapore to establish a lighthouse project around the adoption of USDC for major Singapore businesses.
  • On the issuance of stablecoins: “In some cases, we’re going to issue more stablecoins ourselves. In other cases, there are really interesting teams and projects and companies that are building, and we want to be supportive of the growth in stablecoins for payments, for FX, for DeFi, for a lot of different applications.”
  • On growth: “We’re on track to grow about 10x this year. Looking out in the coming two years, the technology of blockchains is going to make stablecoins useful at internet scale,” and “we’re trying to figure out how to get ahead of that kind of growth.”
  • On working with U.S. regulators: “Last week, the White House, through the top financial regulators in the U.S., issued a report outlining how they wanted to regulate a firm like Circle as an insured national depository institution under Fed supervision. We kind of agree with that basic premise for something that’s potentially underpinning a really broad amount of payments and markets activity.”
  • On the timeline for the merger with blank-check company Concord Acquisition Corp. that will take it public: “I don’t have a specific date or anything like that. We’re just on our way through that process.”
  • On stablecoins and corporations: “For a lot of businesses, they are trying to figure out how to use all of this cash that they have, and that cash is obviously eroding in value at around 6% a year, higher in some countries. So there’s really a desire for people to find ways to have short-term dollar-denominated yield instruments. And crypto yield is a really powerful market.”


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