Circle is defending its USDC business model as stablecoin competitors offer partners a larger share of reserve income. The debate intensified after Coinbase, Circle’s largest distribution partner, backed Open USD alongside Stripe and BlackRock. The competition centers on how issuers balance partner incentives, operating expenses and profitability.
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Circle Chief Commercial Officer Kash Razzaghi explained the company’s first-half 2026 financial figures on October 16. The revenues of Circle amounted to approximately $1.4 billion, with the sum of money paid to distributors and fees being $819 million.
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USDC Economics Reflect Infrastructure and Redemption Expenses
According to Circle, 59 cents out of each revenue dollar was spent on distribution partners and fees. Another $473 million, which equals about 34 cents per revenue dollar, was spent on compliance, liquidity, licensing, banking, and product development. This figure also includes about $214 million in stock-based compensation and expenses.
According to Razzaghi, these expenditures are necessary to build the infrastructure required to enable the operation of USDC economics through various financial institutions, payment channels, and blockchains. It is important to note that such an issuer must have banking connections, licensing, and liquidity in order to make redemptions possible. Razzaghi noted that these expenses were required regardless of how issuers compensated their partners.
“Redemption, compliance, and resilience costs do not simply go away if the issuer chose not to pay for them,” Razzaghi wrote. Such a statement refers to the financial problem that all stablecoin issuers face because there are new networks promising greater participation in revenue from reserves to the participants.
USDC Economics Evolve As Rivals Share Revenue
In June 2026, Open USD was introduced by Coinbase, Stripe, and BlackRock. The business model is designed to provide businesses with the ability to mint and redeem stablecoins for free as well as distribute the reserve revenue among the participants minus the management fee. Currently, the OUSD token of the network is live and adds one more competitor to the market.
Indeed, the model of the network is quite different from that which is characteristic of other stablecoin issuers as regards the relations with distribution partners. The reserve assets bring revenue that is used to support the operation and sometimes distributed among the businesses involved in the promotion of the stablecoins.
However, Circle, in its blog post published on October 16, 2026, did not specifically mention Open USD as an alternative network. It outlined the participation of partners in the USDC economics through the partnerships associated with the balances of the partners on their platforms. Circle claimed that the partners that brought and grew balances of the USDC earn a part of the reserve income brought by them.
In addition, the Global Dollar Network operated by Paxos, which provides the USDG stablecoin, also shares the reserve income among participants. All these models provide more opportunities for exchanges, fintech, and payment businesses in selecting the stablecoin partners.
Circle USDC Transaction Volume Strengthens
Circle has noted over $36 trillion of USDC on-chain transaction volumes in the first six months of 2026. Additionally, the company noted that USDC was involved in over $315 billion of minting and redemptions, amounting to an average of approximately $1.7 billion each day. In June 2026, USDC made up about 77% of transaction volumes of all stablecoins worldwide, up from 60% in the previous year.
The above figures set the scene to understand the reasons provided by Circle for distribution expenditure and investment in infrastructure, helping USDC to gain its market positioning. According to the company, more than 150 partners have an interest in promoting USDC, including exchanges, wallets, banks, fintech companies, payment solutions, and enterprises.
In its second-quarter earnings report, Coinbase has noted that the average value of USDC stored across its products set a new record of $20 billion, growing 44% year over year. Nevertheless, the fact that Coinbase is one of the biggest partners for Open USD shows how even a partner can have interest in a stablecoin without losing its connection with the other stablecoin.
In September 2026, Binance committed to invest $100 million in Circle for the next five years on the condition of receiving a fee related to the USDC stored with the help of Circle’s wallet solution.
Circle USDC Highlights Payments and Redemption Infrastructure
Circle said standard USDC redemptions remain free for customers and typically settle within two business days through standard banking rails. In addition to the standard transactions, Circle also offers free and almost real-time redemptions of USDC for eligible users via Circle Payments Network and other qualifying Circle Platform services, according to Circle’s conditions.
However, fast transactions imply liquidity of payments outside banking hours. According to Circle, keeping the liquidity is necessary for making payments and redemptions at different periods of the day.
The competition now extends beyond stablecoin availability to partner revenue, redemption speed and operating costs. Circle USDC’s transaction scale and existing distribution network, while Open USD and USDG offer alternative approaches to reserve-income sharing. Businesses evaluating these networks will weigh financial incentives against liquidity, compliance and settlement needs as the market develops.
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