Circle defends USDC economics as rivals offer partners bigger revenue share
Stablecoin issuer Circle is pushing back on questions about USDC's economics as competitors pitch larger cuts of reserve income to partners, including Coinbase.
Circle is defending the economic model behind USD Coin as competing stablecoin networks try to win over its distribution partners by offering them a larger share of reserve income.
The pushback comes as Coinbase, described as Circle's largest USDC partner, also backs Open USD, a rival network that distributes reserve income to partners after deducting a management fee. The arrangement highlights competition over how stablecoin issuers and their partners split earnings from the reserves backing the tokens.
Partner economics in focus
Stablecoin issuers earn income from the reserves backing their tokens, typically government securities, and share a portion of that income with partners that distribute the coins. Rival networks are using more generous revenue-sharing terms to attract those partners.
Circle's defense of USDC economics signals that the issuer views its current structure as sustainable even as competitors court the exchanges and platforms that drive stablecoin adoption. The company has not indicated any change to its partner arrangements in the source material.
The stablecoin market has become increasingly competitive, with issuers and networks vying for distribution and for the reserve income that underpins their business models.