2024-09-16
Circle, the issuer of the USDC
stablecoin, predicts that stablecoins will become a mainstream global payment
method.
Dante Disparte, Circle’s Chief Strategy
Officer, emphasized the importance of federal legislation for payment
stablecoins to ensure safe competition and compliance1. He also highlighted the
need for harmonized global regulations to support the widespread adoption of
stablecoins1.
Circle is confident that stablecoins
will play a crucial role in the internet age, and they are preparing for this
future by moving their global headquarters to New York and planning an IPO.
Circle filed for an IPO in January with
the Securities and Exchange Commission. The SEC is reviewing Circle’s IPO
process and Circle is waiting for completion.
Circle, the company behind the USDC
stablecoin, generates revenue primarily from interest on reserves.
Every USDC token issued, Circle holds
an equivalent amount of reserves in the form of cash or cash-equivalents, like
U.S. Treasury securities. These reserves are typically held in highly liquid
and low-risk assets, including:
Government Bonds: Circle
invests a significant portion of its reserves in short-term U.S. Treasury
bonds, which pay interest.
Bank Deposits: Any cash
reserves held at banks may also accrue some interest, although this is
typically lower compared to government bonds.
Since USDC users do not receive
interest on the stablecoin they hold, Circle retains the interest generated by
these reserves. Given the significant volume of USDC in circulation, this can
be a substantial revenue source.
USDC is the 2nd largest
stablecoin by market cap only after USDT. USDC currently has $35.6 billion in
market cap.
