Circle Reports Low Profit Margin Amidst Rising Competition in Stablecoin Market

Circle, the issuer of the USDC stablecoin, has revealed that it retained only 7 cents of net profit for every dollar in revenue during the first half of 2026. This disclosure, made by Chief Commercial Officer Kash Razzaghi in a blog post on October 16, 2026, aims to counter growing competition from rivals offering fee-free services and higher revenue shares to partners.

In total, Circle reported approximately $1.4 billion in revenue and reserve income for the first half of 2026. Of this amount, $819 million, or about 59 cents per dollar, was allocated to distribution partners and transaction costs, while $473 million, or 34 cents per dollar, was reinvested into operations, including compliance and product development. Razzaghi emphasized that this financial structure reflects a sustainable business model, contrasting it with competitors who may compromise on infrastructure to offer higher payouts.

USDC processed over $36 trillion in on-chain transaction volume during the same period, capturing 77% of the global stablecoin transaction volume by June 2026, a significant increase from 60% the previous year. However, the competitive landscape is shifting, particularly with the introduction of Open USD in June 2026, which promotes free minting and redemption, directly passing reserve income to participants.

Circle's financial disclosure serves to reassure existing partners, particularly Coinbase, which holds the largest share of USDC's revenue distribution. As competition intensifies, the sustainability of Circle's profit margin will be tested, raising questions about its ability to maintain its market position while absorbing potential pricing pressures.

© 2026 KLEA News. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Source: KLEA News