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Stablecoins have quietly grown from crypto curiosities into genuine payments rails. Circle’s recent S-1 and subsequent public offering offers a unusually detailed view into how a public-company stablecoin operator works. Let’s dive into some of the key takeaways from it.
1. Stablecoins are already a systemic payments rail
The two clear leaders in stablecoins are Tether’s USDT and Circle’s USDC. USDT still tops the league tables at roughly $150 billion in circulation, lifted by offshore trading desks and emerging-market demand. USDC is smaller at ~$61 billion outstanding, yet it settles value in more regulated venues and has already moved >$25 trillion on-chain since launch, including ~$6 trillion in Q1 2025 alone.
Circle’s token now moves value on a par with mid-tier national clearing systems and more than companies like Paypal.
2. Circle’s revenue engine resembles a floating-rate bond fund
Circle has a pretty simple business model: it parks the dollars that back each USDC in short-term U.S. Treasuries and keeps the interest those T-bills generate of which today there is over $60B. Rate hikes have therefore turbocharged revenue, although USDC in circulation has been a bit lumpy.
More than 97 percent of revenue comes from this interest, which they call as reserve income. Other revenue streams include include the small slice of transaction and infrastructure fees it charges businesses for using its payments, custody, and treasury APIs which are quite immaterial today.
The company’s revenue is thus very dependent on the reserve rate which thye are able to generate which is essentially a slight discount to the prevailing Secured Overnight Financing Rate (SOFR), which so far has gone in their favor the past few years, but if interest rates were to meaningfully decrease could hurt them substantially.
3. Coinbase is both a rainmaker and toll-keeper
Coinbase is Circle’s rain-maker and toll-keeper in one. Back in 2018 the two companies launched the Centre Consortium, splitting governance 50–50 and sharing interest income in proportion to how much USDC each one issued or custodied. That “you earn what you distribute” formula lit the fuse on USDC adoption without forcing Coinbase to guarantee any minimum volume.
Fast-forward to August 2023. Centre dissolves, Circle takes full control of policy, and Coinbase walks away with a minority equity stake plus a perpetual licence to use Circle’s stable-coin trademarks with a new three-year Collaboration Agreement now setting the money flow:
Circle skims a small issuer-retention fee to cover compliance and treasury. The leftover reserve income is shared in two layers:
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Party-product slice: Each firm gets a cut that matches the share of USDC sitting in its own wallets and custody accounts.
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Ecosystem slice: Whatever remains is split 50/50 as long as Coinbase keeps USDC easy to buy, supports it across key products, and shows up on policy.
The 2024 numbers show how big that lever has become. Circle booked about $1.7 billion of revenue yet paid a little over $1 billion back out as distribution costs, nearly $908 million of which went to Coinbase.
One-fifth of the entire USDC float now lives inside Coinbase’s ecosystem, and the exchange pushes velocity further through Base L2, gas-free smart wallets, and fee rebates. That distribution muscle is priceless for growth, but it also means upward of 50%+ of Circle’s revenue will go to Coinbase likely into perpetuity.
4. Institutional partnerships deepen credibility
In addition to Coinbase, two other partnerships can prove critical to Circle’s continued growth.
Binance for non-US growth and circulation
A November 2024 agreement turns the world’s largest exchange into a growth engine for USDC. Circle paid Binance a one-time fee of $60.25 million and now sends monthly incentives that rise with the exchange’s USDC balances. Binance has pledged to keep at least $1.5 billion of the stablecoin in its own treasury, with a working goal of $3 billion, and to market USDC to the platform’s 240 million users.
BlackRock for credibility and asset safety
An initial 2022 partnership made the firm exclusive manager of USDC’s Treasury portfolio. A new four-year agreement signed in March 2025 tightened the link. Circle now commits to hold at least 90 percent of its U.S. fiat reserves (excluding bank deposits) in BlackRock vehicles, including the SEC-registered Circle Reserve Fund. In exchange BlackRock agrees to prioritise USDC in its own capital-markets work and to stay out of launching a competing dollar stablecoin. BlackRock also took a 10% stake in Circle’s IPO.
5. The IPO Pop shows Demand for Stablecoin Pure-plays
Circle priced its IPO at $31 a share and raised about $1.05 billion, then finished its first session at $83.23. The stock has since crossed triple digits, representing a market cap upwards of >25B. How its traded has sent the clearest possible signal that public-market investors wanted direct exposure to the stablecoin theme.
Annualising first-quarter numbers puts 2025 revenue around $2.3 billion, adjusted EBITDA near $490 million, and net income roughly $260 million. On those run-rate figures the market is paying about eight times sales, forty-seven times EBITDA, and ninety times earnings.
For comparison Visa trades near fifteen times EBITDA but carries a mature five-percent top-line growth profile; money-market funds carry virtually no multiple at all.
It’s a sporty multiple for a company still navigating real risks: nearly all of Circle’s revenue comes from interest on reserves, which could compress if rates fall. More than half of that revenue is paid out to Coinbase in distribution costs. And despite years of effort, the company hasn’t meaningfully diversified beyond interest income.
But the market seems to be betting that Circle can thread the needle. Investors are underwriting continued double-digit growth in USDC circulation, meaningful traction in fee-based products like CCTP and merchant APIs, and a regulatory glide path that could entrench USDC as the compliant dollar of choice.