Circle is making a public case for its stablecoin business model as competing networks increasingly court its distribution partners with promises of higher returns on reserve assets.
According to reporting by CoinDesk, Circle’s Chief Commercial Officer Kash Razzaghi outlined the company’s cost structure in a Friday blog post, revealing that the stablecoin issuer retained just 7 cents of net profit for every dollar of revenue generated in the first half of 2026. The firm collected approximately $1.4 billion in total revenue during that period, with distribution and transaction costs consuming $819 million.
The disclosure arrives at a critical moment. Coinbase, Circle’s largest USDC distribution partner, is simultaneously backing Open USD—a rival stablecoin network that passes reserve income to participants after deducting only a management fee. The competitive tension reflects a fundamental disagreement about how stablecoin economics should work, and who deserves to profit from the assets backing digital dollars.
The Economics of a Stablecoin Issuer
Circle’s remaining $473 million in first-half revenue covered compliance, liquidity, and product development, along with approximately $214 million in stock-based compensation. Razzaghi argued that these expenses are not optional luxuries but necessary costs of operating a stablecoin network responsibly.
“The costs of redemption, compliance, and resilience don’t disappear just because the issuer declined to pay them,” he wrote, directly addressing the premise underpinning Open USD’s value proposition.
The distinction matters. Open USD, which launched in June with backing from Coinbase, Stripe, and BlackRock, allows businesses to mint and redeem stablecoins without fees while capturing most reserve income. Circle’s model reserves a larger portion of that income for operational expenses—a trade-off the issuer now contends reflects the true cost of maintaining a stable, compliant network.
Competitive Pressure from Multiple Directions
Circle faces pressure not only from Open USD but also from the Paxos-led Global Dollar Network (USDG), which similarly distributes reserve income to participants. The emergence of multiple rival approaches to stablecoin economics has effectively forced Circle to defend its own approach in public.
The company is not passively accepting market share losses. In September, Binance acquired a $100 million stake in Circle under a five-year agreement that includes variable fees tied to USDC held through Circle’s wallet service. The investment signals continued confidence in USDC despite the competitive landscape.
Circle has also moved to offset some complaints about its fee structure. The company now offers near-real-time USDC redemptions at no cost to qualifying platform customers and payment flows through its Payments Network, while standard redemptions remain free and typically settle within two business days.
Why This Matters for Stablecoin Adoption
The dispute over reserve income distribution reflects a broader tension in the stablecoin market. As adoption accelerates, more businesses want to capture the yield generated by billions in tokenized assets. Open USD and similar competitors argue their model democratizes those returns, distributing them broadly among network participants.
Circle’s counter-argument is that operational costs are real and substantial. A stablecoin that cuts corners on compliance or liquidity management might offer higher returns to partners initially—but poses systemic risks that could ultimately prove far more expensive.
The outcome of this competition will shape how the next generation of stablecoins are structured and who profits from their growth.