Behind 60 billion USDC: Uncovering the rise of the Circle Empire

Circle's Financial and On-Chain Dual Strategy.

Original:Unpacking Circle's IPO Filing and USDC's On-Chain Footprint

Author:Tanay Ved

Translated by:Plain Blockchain

Cover:Circle

Key Points:

1. Circle achieved revenue of $1.7 billion in 2024, with 99% coming from USDC reserve interest income. Distribution costs with partners like Coinbase and BN totaled $1.01 billion, reflecting the critical role of trading platforms in expanding USDC coverage.

2. The total USDC supply has rebounded to $60 billion, with a 30-day average transfer volume of $40 billion, showing market confidence and cross-chain adoption recovery. However, USDC remains sensitive to interest rate changes, competitive pressures, and regulatory developments.

3. USDC continues to grow in usage on major trading platforms, currently accounting for 29% of BN spot trading volume, thanks to Circle's strategic partnerships.

4. Looking ahead, Circle's next phase may depend on diversifying from passive interest income to active income sources, including tokenized assets, payment infrastructure, and capital market integration.

Introduction

Circle, the largest stablecoin issuer in the United States and the company behind the $60 billion USDC, recently filed an IPO application, providing an opportunity to gain insights into the financial condition and strategic prospects of this crypto infrastructure company. As the only direct investment path in the fastest-growing area of cryptocurrency in the public market, Circle's IPO application comes at a critical moment when stablecoin legislation is gradually taking shape and competition is intensifying. Although market conditions may delay the IPO, by combining USDC's on-chain data, we will extract key information from Circle's IPO filing, analyze its revenue sources, the impact of interest rates on its business, and the role of platforms like Coinbase and BN in shaping USDC distribution, and assess Circle's positioning in an increasingly competitive market.

Based on Circle's 2024 reserve income of $1.6 billion and approximately $44 billion in reserve assets, the annualized yield is estimated at around 3.6%. If interest rates remain at current levels and USDC supply remains stable or grows, Circle's reserve income may remain steady. Our previous research on USDC supply declining during periods of rising interest rates showed that Circle's reserve income is highly correlated with current interest rates, indicating the sensitivity of its income model to interest rate changes. With the effective federal funds rate between 4.58-5.33% in 2024, what would Circle's prospects be if rates decrease? In the S-1 filing, Circle estimates that a 1% interest rate reduction could lead to a $441 million decrease in stablecoin reserve income, a key risk outlined in the document. Since Circle retains all earnings (unlike issuers like Ethena and Maker who pass interest to holders), its business model remains sensitive to future interest rate changes, competitive pressures, and regulatory evolution. [The rest of the translation follows the same professional and precise approach, maintaining the specified terminology translations.]