Circle Lays Out USDC Cost Structure in Public Post
Circle (CRCL, last traded at $82.25 before the market closed) has moved to defend the economics behind its USDC stablecoin, responding to mounting pressure from rival projects that promise a bigger slice of reserve income to their business partners. At the center of the dispute is its largest distribution partner, Coinbase, which has thrown its weight behind a competing stablecoin initiative.
In a blog post published on Friday, Circle's Chief Commercial Officer Kash Razzaghi walked readers through the company's first-half 2026 financials. He explained that for every dollar of revenue generated, Circle retained roughly seven cents as net profit. Total revenue for the period came to approximately $1.4 billion, while distribution and transaction-related expenses consumed $819 million. The remaining $473 million, Razzaghi noted, was allocated to compliance, liquidity management, and product development. Embedded within that figure was roughly $214 million in stock-based compensation and associated costs.
Razzaghi was direct about why those costs cannot simply be eliminated. "The costs of redemption, compliance, and resilience don't disappear just because the issuer declined to pay them," he wrote, a line that implicitly targeted rivals advertising fee-free minting and redemption.
Open USD and the Push to Share Reserve Income
Coinbase is not only Circle's biggest USDC distribution partner but also a backer of Open USD, a competing stablecoin framework that was unveiled in June. The project is backed by Stripe and BlackRock alongside Coinbase and is designed to let participating businesses mint and redeem stablecoins without paying fees. Instead, the reserve income generated by the underlying assets is passed through to participants after a modest management fee is deducted. The OUSD token associated with the project is now live.
What is notable is that Circle's public post never named Open USD directly. However, the competitive landscape extends beyond that single project. The Paxos-led Global Dollar Network, which issues the USDG token, follows a similar model of distributing reserve income to its participants, intensifying the pressure on Circle's traditional fee-based structure.
Expanding Distribution and Faster Redemptions
In a clear effort to broaden its partner base and reduce dependence on any single channel, Circle secured a new strategic investment in September. Binance acquired a $100 million stake in the company under a five-year agreement that includes a fee tied to the volume of USDC held through Circle's wallet service.
On the product side, Circle emphasized that standard USDC redemptions remain free of charge and typically settle within up to two business days. The company also highlighted that qualifying platform customers and payment flows routed through the Circle Payments Network now have access to near-real-time redemptions at no additional cost, a feature it positioned as a competitive advantage over rivals that may impose delays or fees at the redemption stage.
Broader Stablecoin Yield Dynamics
The competitive tension over who captures reserve income sits against a shifting yield backdrop. According to market commentary, diversified real-world-asset (RWA) stablecoins are sustaining returns in the 5-to-7 percent range by drawing on real-credit exposure, while purely crypto-funded yields have compressed to roughly 4 percent. Regulatory momentum, including frameworks such as the GENIUS Act, is pushing yield-generating activity off-chain and into regulated structures. Analysts cited in the broader discussion project the total addressable market for RWA-backed stablecoin products could expand to around $4 billion within three years, underscoring why both Circle and its rivals are competing aggressively for distribution partners and institutional flows.
