Circle Defends USDC Economics as Rival Stablecoins Court Its Partners With Bigger Reserve Payouts
Key Takeaways
- •Circle disclosed that it kept roughly 7 cents of net profit for every dollar of revenue in the first half of 2026, on total revenue of about $1.4 billion.
- •Distribution and transaction costs consumed $819 million of Circle's revenue, while the remaining $473 million funded compliance, liquidity, and product development, including about $214 million in stock-based compensation.
- •Coinbase remains Circle's largest USDC partner but has also backed Open USD alongside Stripe and BlackRock, a project whose live OUSD token passes reserve income to participants after a management fee.
- •Circle countered rivals' revenue-sharing models, including the Paxos-led Global Dollar Network, by arguing that redemption, compliance, and resilience costs persist regardless of whether an issuer pays them.
- •In September, Binance bought a $100 million stake in Circle under a five-year agreement, and Circle now provides free near-real-time redemptions to qualifying platform customers and Circle Payments Network flows.
Stablecoin issuer Circle (CRCL) is defending its business model after Coinbase — the company's largest distribution partner — threw its weight behind a rival project that promises businesses a larger share of the income generated by stablecoin reserves.
In a blog post published on Friday, Circle Chief Commercial Officer Kash Razzaghi said the firm kept roughly 7 cents in net profit for every dollar of revenue during the first half of 2026. Circle generated about $1.4 billion in revenue over that period, while distribution and transaction costs totaled $819 million.
The figures sit at the center of an intensifying dispute over who is entitled to the interest earned on the assets backing stablecoins — typically cash and short-dated U.S. Treasuries that yield income for the issuer. Circle said the remaining $473 million covered compliance, liquidity and product development — a sum that also included approximately $214 million in stock-based compensation and related costs.
Coinbase remains Circle's largest $USDC partner, but it is also a backer of Open USD alongside Stripe and BlackRock. Unveiled in June, Open USD aims to let businesses mint and redeem stablecoins without fees while passing reserve income, minus a management fee, to participants — a structure that contrasts with Circle's practice of retaining part of the yield to fund operations such as compliance and product development.
Circle's post did not directly name Open USD, whose OUSD token is now live. Other competitors, including the Paxos-led Global Dollar Network (USDG), likewise share reserve income with participants.
"The costs of redemption, compliance, and resilience don't disappear just because the issuer declined to pay them," Razzaghi wrote.
Circle has also moved to secure additional distribution partners. In September, Binance purchased a $100 million stake in the company under a five-year agreement that includes a fee tied to $USDC held through Circle's wallet service.
The company noted that standard $USDC redemptions remain free and "typically settle in up to two business days." Qualifying platform customers and payment flows through the Circle Payments Network can now access near-real-time redemptions at no cost, it added. The competing pitches now come down to terms businesses can compare directly — payout structures, redemption speed and fees — as issuers and their distribution partners negotiate how the income from stablecoin reserves gets split.
