English Description: Learn how Circle and USDC generate revenue from stablecoin reserves, how US regulation affects CRCL’s compliance position, and why Open USD’s distribution-led model could reshape competition, profitability and investor risk.
The boundary between cryptocurrency and traditional finance is converging at a faster pace, and stablecoins are becoming increasingly important as a central hub in this transformation. USDC, issued by the US fintech company Circle Internet Group (NYSE: CRCL), has long held its position as the world’s second-largest stablecoin. However, a new competitive push launched at the end of June 2026 by more than 140 institutions, including Stripe, Visa, Mastercard and BlackRock, has prompted the market to reassess the commercial foundations of this “first listed stablecoin stock”. The following provides a systematic review of the company’s background, profit structure, regulatory environment and the latest competitive landscape.
Understanding Circle: From Payment Platform to Stablecoin Infrastructure Provider
Circle is a technology company focused on digital asset financial services. Its business focus has shifted from its early payment platform model to the issuance of stablecoins, reserve management and the development of enterprise-grade blockchain infrastructure.
Company Development and Listing History
Circle was founded in 2013 by Jeremy Allaire, the company’s co-founder and chief executive officer, and Sean Neville. Its early business covered peer-to-peer payments and cryptocurrency trading. In 2018, Circle partnered with Coinbase to launch USD Coin (USDC), a stablecoin pegged 1:1 to the US dollar, through the Centre consortium jointly established by both parties. This became a key turning point in the company’s development. After years of expansion, Circle officially listed on the New York Stock Exchange in 2026 under the ticker symbol CRCL, moving from a behind-the-scenes infrastructure provider into the public capital market.
How USDC Works
The core design of USDC is to maintain a 1:1 peg with the US dollar. Its issuance is backed by fully reserved assets, ensuring that every USDC in circulation is matched by an equivalent amount of cash or short-term US Treasury securities. Circle works with independent accounting firms to publish monthly attestation reports on its reserve assets. This path of transparency and compliance is an important feature that distinguishes it from some competitors. Reserve coverage can be summarised with a simple Chinese expression:
Reserve coverage ratio is written as
Reserve coverage ratio = Total reserve assets / Total stablecoins in circulation
When this ratio remains at or above 100% over the long term, it indicates that the issuer has sufficient redemption capacity. This is also one of the key indicators assessed under regulatory frameworks.
| Feature | USDC (Circle) | USDT (Tether) | Open USD (OUSD) |
|---|---|---|---|
| Transparency | Publishes third-party attestation reports every month | Relatively limited disclosure | Governed by an independent committee, with an emphasis on multi-party oversight |
| Regulatory positioning | Subject to the US federal stablecoin regulatory framework | Relatively fragmented regulatory path | Operated by a consortium of more than 140 companies |
| Market share | Accounts for about one quarter of the stablecoin market | Has long held the leading market share | Launched in 2026, with market share still being built |
| Revenue-sharing model | Reserve interest is mainly shared between the issuer and major distribution partners | Interest income mainly belongs to the issuer | Reserve interest is distributed to distribution partners within the network according to participation rules |
Revenue Structure and Compliance Logic Under the Regulatory Framework
To understand Circle’s business model, it is essential to recognise the highly concentrated nature of its revenue sources and the far-reaching impact of the US stablecoin regulatory framework on this structure.
Reserve Interest: The Dominant Revenue Source
Circle’s main revenue source is the interest income generated by USDC reserve assets, mainly short-term US Treasury securities and cash. This revenue has long accounted for more than 90% of the company’s total revenue. This also means that when the interest-rate environment changes, the company’s profitability can fluctuate significantly. A rate-hiking cycle supports its interest income, while a rate-cutting cycle may compress its profit margin. (Source: Phemex, published: July 2026)
Enterprise-Grade Blockchain Solutions
In addition to reserve interest, Circle also generates revenue by providing blockchain payment solutions and API services to enterprises. These services cover enterprise wallets, fiat on- and off-ramp channels, cross-border payment networks and other functions. Such service fees provide the company with a relatively stable source of recurring revenue and represent an important direction for reducing its dependence on a single revenue stream.
The GENIUS Act: A Watershed for US Stablecoin Regulation
In July 2025, the US Congress passed, and the President signed, theGENIUS Act, establishing a federal prudential regulatory framework for payment stablecoins for the first time. Its core requirements include: permitted issuers must hold eligible reserve assets on a 1:1 basis, publicly disclose reserve details every month, and be subject to supervision by the Office of the Comptroller of the Currency or state-level regulators.
Only institutions licensed at the federal or state level may issue payment stablecoins to US users;
Institutions whose total issuance exceeds a certain threshold must be subject to stricter federal supervision and annual audits;
Reserve assets are strictly limited to highly liquid assets such as cash, insured deposits and short-term US Treasury securities.
Several industry analyses have noted that the compliance costs created by the Act are pushing the stablecoin market towards leading compliant companies. As one of the stablecoins that completed compliance preparations early, USDC is regarded as one of the main potential beneficiaries of this regulatory shift. (Source: Grandall Law Firm, published: 2026)
A Changing Competitive Landscape: The Impact of Open USD and Circle’s Response
On 30 June 2026, an initiative jointly launched by major payment and financial institutions changed the competitive narrative of the stablecoin market within a short period.
Cause: Led by Open Standard, more than 140 companies, including Stripe, Visa, Mastercard, BlackRock, Coinbase and BNY Mellon, jointly announced the launch of a new stablecoin, Open USD (OUSD). Its core mechanism is to distribute the interest income generated by reserve assets to participating distribution partners according to rules, rather than retaining all of it at the issuer level.
Development: On the day the news was announced, Circle’s share price fell by more than 16% in a single trading session, reaching a four-month low. Analysts then diverged in their views. Some saw this as a substantive challenge to Circle’s core profit model, while others argued that OUSD would still need time to prove real market adoption. The following day, some investment institutions raised their ratings to neutral but sharply lowered their target prices, reflecting the market’s continuing reassessment of the long-term competitive landscape.
Impact: The event shifted the focus of competition in the stablecoin industry from “who has the largest issuance volume” to “who controls the stronger distribution network”. Circle’s existing revenue-sharing agreement with Coinbase is reportedly due for renewal in August 2026, and this point is seen by the market as an important window for observing whether Circle can maintain its core distribution relationship.
(Source: CoinDesk, published: June 2026)
In response to market concerns, Allaire publicly addressed questions about the sustainability of Circle’s business model:
“Consortiums formed by large enterprises are often inefficient in coordination, and their incentives are difficult to align. This slows decision-making and makes it difficult to create genuinely lasting innovation.”
He also emphasised that Circle currently shares most of its revenue with distribution partners, while the portion it retains is mainly used for ongoing infrastructure investment. This is fundamentally different from a model that transfers all revenue away from the issuer.
Opportunities and Potential Risks of Investing in Circle Stock
Assessing the investment value of Circle requires weighing both its growth logic and its structural risks.
Growth Drivers Worth Watching
The overall stablecoin market is still expanding. Several institutions expect the market to grow from hundreds of billions of US dollars to a much larger scale over the coming years. As a leading compliant issuer, Circle may continue to benefit;
The company maintains deep partnerships with traditional financial giants such as Visa and Mastercard, while continuing to expand new use cases in cross-border payments, corporate settlement and related areas, including discussions with Japan’s Nomura Securities on instant foreign exchange settlement cooperation;
As a listed company, Circle is required to disclose its financial position regularly. Greater transparency may help attract more attention from institutional investors.
Structural Risks to Watch
High revenue concentration: reserve interest accounts for an extremely high proportion of total revenue. If the market enters a rate-cutting cycle, the company’s profit elasticity will come under clear pressure;
Uncertainty in distribution relationships: the revenue-sharing agreement with Coinbase is about to enter a renewal window, and the outcome of negotiations will directly affect the company’s future cost structure;
Accelerating changes in competition: the emergence of new consortium-style stablecoins such as Open USD is fundamentally challenging the traditional profit logic in which issuers retain reserve income. The long-term direction of market share remains highly uncertain.
Questions Related to Circle and USDC
What is Circle’s stock ticker, and where can it be traded?
Circle’s stock ticker is CRCL. It is listed on the New York Stock Exchange, and investors can buy and sell the stock through securities brokers that support US stock trading.
Are USDC’s reserve assets safe, and are they regulated?
USDC’s reserve assets mainly consist of highly liquid assets such as cash and short-term US Treasury securities, and are reviewed monthly by third-party accounting firms. As an institution subject to the US federal stablecoin regulatory framework, Circle’s operations must comply with the relevant reserve and disclosure requirements.
What is Open USD, and what kind of threat does it pose to USDC?
Open USD is a new stablecoin launched by the Open Standard consortium, which comprises more than 140 companies including Stripe, Visa, Mastercard and BlackRock. Its core feature is that it distributes reserve interest income to participating distribution partners. This directly affects the profit model of traditional issuers such as USDC, which retain interest income, and is therefore viewed by the market as a potential structural challenge.
What practical impact does the GENIUS Act have on Circle?
The Act establishes a federal prudential regulatory framework for US payment stablecoins for the first time, clarifying requirements for reserve assets, disclosure obligations and regulatory oversight. Because Circle completed its compliance preparations relatively early, several industry analyses suggest that it may hold a comparatively favourable position in this regulatory shift.
What is the relationship between Circle and Coinbase?
Coinbase was an early partner of Circle. The two companies jointly established the Centre consortium, which supported the early issuance of USDC. Circle is now independently responsible for the issuance and management of USDC, but Coinbase remains an important distribution partner. The revenue-sharing agreement between the two parties is due for renewal in August 2026.
