Why does Circle only keep 7 cents for every dollar it earns?

This article is from: Circle Chief Business Officer Kash Razzaghi

Compiled by Odaily (@OdailyChina); Translator: Azuma (@azuma_eth)

Editor's Note: As the "first stablecoin stock," Circle (CRCL) has long been a popular target when the market chases crypto narratives. But for many CRCL investors, Circle has always been accompanied by a highly divisive controversy — to achieve its desired distribution, most of the revenue Circle earns must be handed over to distribution partners such as Coinbase, Hyperliquid, and Binance. Some believe this is the core factor constraining CRCL's share price, while others see it as a necessary move to safeguard USDC's fundamentals...

Recently, Chief Business Officer Kash Razzaghi personally published an article explaining the specific details of this expenditure and its strategic significance. As the executive directly responsible for Circle's commercial partnerships, Kash may be the person in the world who best understands whether Circle should be spending this money.

The following is the original content from Kash, compiled by Odaily.

In the first half of 2026, on-chain transaction volume settled in USDC surpassed $36 trillion. Circle minted and redeemed more than $315 billion in USDC, averaging about $1.7 billion per day (including weekends and holidays). During this period, Circle spent a cumulative $819 million on USDC distribution partners and transaction-related costs. As of June, USDC accounted for approximately 77% of global stablecoin transaction volume, up significantly from 60% a year earlier.

These figures paint a picture of a "digital dollar" fully deployed in real-world production — trillions of dollars in settlement volume, billions of dollars in two-way fiat conversions every day, and the vast majority of economic benefits flowing back to the partners building businesses on top of it.

Yet recently, some new entrants claim they can build a more "usable" stablecoin. Their pitch is always the same: existing issuers retain too much of the economic benefit, redemption fees are high, and the new model solves both problems at once.

This pitch is seductive, but it both distorts how USDC actually works today and severely underestimates the cost of making a stablecoin truly usable.

I run Circle's commercial business, and my team drives commercial partnerships that bring USDC to the world's leading wallets, exchanges, banks, fintechs, large enterprises, and payment networks. Over the years, Circle has built deep experience in landing stablecoin partnerships, helping customers around the world acquire, use, and profit from USDC through a global partner network. From this vantage point, I want to lay out the real facts and data so that anyone facing technology and ecosystem choices can judge based on substance rather than one-sided rhetoric or misleading headlines.

First, three core facts need to be stated upfront:

• For years, Circle has shared the vast majority of USDC's economic benefits with the partners who drive its adoption.
• All Circle customers have always been able to redeem for free through standard banking channels, with settlement typically completed within at most two business days. In addition, customers who process money flows through the Circle Payments Network (CPN) or build businesses on the Circle platform can now enjoy 24/7/365, near-instant, free USDC redemption.
• On the core metrics that truly matter for business operations, USDC is unquestionably the most practical stablecoin on the market today. As Circle has invested more than 8 years continuously building and investing in its underlying infrastructure, this advantage gap continues to widen.

Next, let's dig into each one.

How Are USDC's Returns Distributed?

In the first half of 2026, Circle generated approximately $1.4 billion in revenue, of which about $819 million was paid to USDC distribution partners and transaction costs. That means for every $1 of revenue, roughly 59 cents went directly to global partners — the very parties that popularized USDC across wallets, exchanges, banks, fintechs, enterprises, and payment networks around the world.

Most of the remaining revenue we reinvested into building the network. Circle spent approximately $473 million (about 34 cents of every $1 of revenue) on acquiring compliance licenses, expanding banking relationships, securing settlement liquidity, building compliance systems, developing new products, and advancing blockchain-level integrations. It is these continuous investments that make USDC the world's most practical, most compliant, and most fully licensed stablecoin. Of every $1 of revenue earned, Circle ultimately retains only 7 cents in net profit.

This reinvestment is by no means burdensome overhead — it is precisely the cornerstone that keeps USDC highly usable, crystallizing more than 8 years of deep work. A digital dollar must be usable in all scenarios and redeemable anytime, anywhere; held securely by regulated institutions; and flow natively across the various public chains and platforms where businesses operate.

This means Circle must hold licenses in major jurisdictions worldwide, ensuring that banks in Europe, fintechs in Latin America, and payment networks in the U.S. can all use USDC under their respective applicable regulations. It also means Circle must complete native deployments on dozens of blockchains and provide cross-chain interoperability. At the same time, it means Circle needs ample liquidity and a deep banking partner network to support billions of dollars in daily minting and redemption across major financial centers worldwide.

Without this foundation, a stablecoin is not a true digital dollar — it is merely a token. This is exactly the question that new issuers claiming to give away the "vast majority" of their returns deliberately avoid — creating a stablecoin that distributes all its returns but has no ability to fund any infrastructure. Redemption costs, compliance costs, and system resilience costs do not simply vanish because an issuer refuses to bear them. Every extra dollar Circle invests widens the competitive moat by another notch.

So the real disagreement was never "should reserve income be shared with the businesses building the ecosystem" — USDC's financial data has long given an affirmative answer. The real question is how to reasonably allocate and maximize shared returns while continuously funding underlying infrastructure and ensuring the stablecoin's core utility. This article will continue to break down: how partners participate in revenue sharing, how the redemption mechanism works, and what the infrastructure actually costs.

How Partners Share in USDC's Economic Benefits

Distribution revenue is directly tied to promotion results — partners that bring the most USDC to market earn the most. Coinbase, our largest and longest-standing partner, is the most representative example. In its Q2 earnings report, Coinbase disclosed that the average USDC held across its various products hit a record high of $20 billion, up 44% year-over-year.

But Coinbase is just one member of this vast network. In September this year, Binance, the world's largest exchange, signed a five-year commercial agreement with Circle and invested $100 million in Circle. In addition, more than 150 partners spanning the entire financial system and businesses across industries share in USDC's growth dividends, covering exchanges, wallets, digital banks, fintech platforms, payment platforms, traditional banks, and large enterprises. It is this broad participation base that drove USDC to carry approximately 77% of global stablecoin transaction volume in June (up from 60% a year earlier).

Circle's business model is clear, and partners participate in USDC's economic benefits mainly through two channels:

• Bring in and expand capital scale to earn reserve income sharing. Distribution partners that custody and accumulate USDC pools on their own platforms can earn a corresponding share of reserve interest based on the scale they accumulate. The more USDC scale a partner drives, the higher the share they receive.
• Build businesses on the platform to enjoy free instant redemption. Customers that process payment clearing through the Circle Payments Network (CPN), or build businesses using Arc, Circle Mint, and Circle Wallets, can all enjoy free near-instant redemption. The next section explains in detail how this works.

The Truth About the Redemption Mechanism

The redemption issue has generated the most confusion, so I want to explain the details thoroughly. The world's leading payment networks, including Visa and Mastercard, use USDC for settlement 7 days a week, even on weekends and holidays when the traditional banking system is closed. The reason payment institutions worldwide trust Circle's underlying capabilities to convert USDC into dollars is precisely that this system has been battle-tested at scale, around the clock, year-round.

In Q1 2026 alone, Circle redeemed $71.8 billion in USDC, equivalent to about 90% of the total circulating market cap at the time. In Q2, total minting and redemption further reached $170 billion, up 105% year-over-year. No other stablecoin issuer can match this scale in fiat redemption processing.

Circle's redemption terms are based on three fundamental principles:

• All Circle customers can redeem USDC for free. Redemptions through standard banking channels typically settle within at most two business days.
• Payment businesses on the Circle Payments Network (CPN) can now enjoy free near-instant settlement. Institutions using USDC as the underlying payment clearing layer on CPN — including card networks, acquirers, cross-border remittance providers, large multinational enterprises, and fintechs processing large real volume — can now achieve zero-cost, near-instant fund redemption. We welcome payment companies worldwide to connect to CPN, which natively includes this capability.
• Circle platform customers can qualify for free near-instant redemption through multiple paths. Paths include holding a USDC balance on the Circle platform and deeply integrating Circle's product suite (including CPN, Arc, Circle Mint, Circle Wallets, and other applicable products). Eligible customers can enjoy zero-fee near-instant redemption.

The core support for achieving this near-instant settlement speed is ample liquidity. To achieve 24/7, unlimited, near-instant redemption (rather than waiting days), Circle pre-positions substantial cash balances across its global partner bank network; once a redemption request is confirmed on-chain, funds can be wired immediately. These funds must remain highly liquid at all times, so their yield is naturally lower than holding U.S. Treasuries; at the same time, they must remain available around the clock (even when the banking system is closed on weekends), which means maintaining a bank channel network that can mobilize funds at any time over the long term.

We bear this holding cost ourselves, sparing customers long waits. Liquidity is the heaviest-weighted and most costly element of the redemption model, and as long as customers actively participate in the network ecosystem, we never charge extra for this capability.

Building a Globally Trusted Digital Dollar

Anyone evaluating and comparing different stablecoin models should look beyond surface-level yield pitches and ask deeper questions — can the issuer honor redemptions on demand at any moment? Can it operate smoothly during periods of extreme market stress? Can it consistently maintain strict compliance across different jurisdictions? And can it sustainably give back to ecosystem infrastructure day after day over the long term? These are also the core questions regulators inevitably ask during reviews. A stablecoin is far more than software code; it is financial monetary infrastructure, and its foundation must be rock solid.

Circle has experienced this trade-off balance deeply. USDC was initially launched in 2018 under a consortium model; in 2023, Circle took over full governance and rebuilt its operating system around one core logic — the issuer must have the ability to continuously invest in network infrastructure. This decision greatly advanced everything that followed. Behind every USDC in circulation today lies more than 8 years of long-term engineering investment.

This accumulated foundation includes:

• More than 55 global financial licenses and registrations (including a national trust bank charter granted by the U.S. OCC and EU MiCA license compliance);
• Clearing and settlement relationships with more than 25 banks worldwide (including systemically important banks);
• Reserve assets allocated to government money market funds managed by BlackRock and custodied by BNY, with monthly independent attestation reports;
• An anti-money laundering and sanctions compliance management system covering 185 countries and regions worldwide;
• Native deployment support across more than 35 major public chains;
• And an ample instant liquidity pool capable of smoothly handling approximately $1.7 billion in massive two-way minting and redemption daily.

This is "usability" at industrial scale. USDC is used by major payment giants as the clearing layer, increasingly included by banks in reserve asset allocation, and regarded by developers broadly as the default standard dollar for on-chain applications. The entire industry is deeply rooted in it — among the participants in recently formed new stablecoin alliances, more than 70% of companies already build their businesses on USDC. They are all partners we deeply value, and we look forward to continuing to build together with them.

The Self-Reinforcing Flywheel

USDC's operating model is essentially a continuously self-reinforcing "flywheel," designed to achieve symbiotic win-win outcomes across the entire ecosystem. The vast majority of economic benefits are directly passed on to the partners driving market adoption, all customers can enjoy free redemption channels, and the revenue Circle retains is fully reinvested into the infrastructure foundation, keeping it firmly in the position of the world's most practical stablecoin.

Each link in the flywheel accelerates the next: partners are incentivized by the sharing mechanism to actively grow USDC scale; this scale growth provides ample funding to land more compliance licenses, thicken the liquidity buffer, and expand more public chain integrations; and a more mature and universal digital dollar, in turn, attracts more developers, real-economy enterprises, and end users, setting off the next wave of adoption.

In the more than 8 years since USDC's birth, this flywheel has weathered multiple brutal bull and bear market cycles and has always run steadily. Looking toward the next cycle, we will continue to increase investment to make it even stronger.

Across the entire chain of distribution and customer acquisition, clearing and payments, banking channels, institutional trading, and blockchain underlying infrastructure, Circle has built the industry's broadest and most deeply integrated stablecoin ecosystem moat. If you are thinking about where to build your next-generation business, we are ready to walk forward with you.