Circle stock rose about 5% in pre-market trading after Arc, its own blockchain, was valued at $3 billion in a token presale.
The stablecoin giant Circle said in a May 11 filing with the U.S. Securities and Exchange Commission that it agreed to sell 740 million ARC tokens to institutional investors.
The sale is expected to bring in about $222 million in gross proceeds. With an initial supply of 10 billion ARC tokens, that same $0.30 price implies a fully diluted network valuation of $3 billion.
Read also: Circle CEO Sees “Huge Opportunities” in Chinese Yuan-Pegged Stablecoin
The investors were led by a16z crypto, the crypto arm of venture capital firm Andreessen Horowitz. CNBC reported that a16z crypto invested $75 million.
Other investors included BlackRock, Apollo Funds, Intercontinental Exchange, SBI Group, Standard Chartered Ventures, ARK Invest and others.
- Arc is Circle’s new public stablecoin-focused blockchain.
- Circle wants banks, payment firms, fintechs and developers to use Arc to move stablecoins, issue assets, settle payments and just build financial apps.
As of press time, USDC▼$0.9996 runs across multiple blockchains, including networks such as Ethereum, Solana and others. That means Circle issues the stablecoin, but much of the infrastructure still depends on outside networks.
Arc changes that setup if it works as planned, letting Circle own more of the rails that USDC and related financial products run on.
Arc Gives Circle a Second Business Line
Stablecoins are becoming more regulated and more mainstream, but that also means banks and other payment companies could launch their own dollar-pegged tokens.
That would make Circle’s core USDC business, in theory, more competitive. Therefore, Arc looks like a way for Circle to move deeper into infrastructure, where it can earn from network activity, validation and developer tools.
The filing also includes a lock-up period. Investors won’t be able to sell, transfer or otherwise move their ARC tokens for at least one year after Arc switches to a Proof-of-Stake or delegated Proof-of-Stake model.
Circle shares rose more than 5% in pre-market trading to $123.26 after the news, according to Yahoo Finance data.
Read more: Circle Open Sourcing Arc to Outside Hackers Ahead of Mainnet Launch
