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Circle said it retained about 7 cents in net profit for each revenue dollar in the first half of 2026, after $819 million in distribution and transaction costs. Its defense comes as Coinbase and other firms back stablecoin projects that offer participants a share of reserve income.
Circle defended the economics of its USDC stablecoin, saying it kept about 7 cents in net profit per revenue dollar in the first half of 2026 as rival stablecoin projects offer businesses and partners a share of income from reserves. The argument comes as Coinbase, Circle’s largest USDC distribution partner, also backs Open USD, a competing network designed to pass reserve income to participants after a management fee.
In a Friday blog post, Circle Chief Commercial Officer Kash Razzaghi said the company generated about $1.4 billion in revenue during the first six months of 2026. Distribution and transaction costs totaled $819 million, according to the figures he cited. Circle said the remaining $473 million went toward compliance, liquidity and product development, and included about $214 million in stock-based compensation and related costs.
Circle’s post framed those expenses as part of operating a stablecoin business, rather than income that could simply be returned to partners. “The costs of redemption, compliance, and resilience don’t disappear just because the issuer declined to pay them,” Razzaghi wrote. The figures and explanation are Circle’s account of its finances and cost structure.
Coinbase is Circle’s largest USDC partner and also backs Open USD alongside Stripe and BlackRock. Open USD, announced in June, is intended to let businesses mint and redeem stablecoins without fees while distributing reserve income to participants after a management fee. CoinDesk reported that its OUSD token is now live. Circle did not name Open USD directly in its post.
The Contest Over Reserve Income
The dispute concerns who receives the earnings generated by assets held to back stablecoins. Issuers can use reserve income to support their businesses, while partner-sharing models offer a way to attract platforms and payment companies by giving them a portion of that income. The competing approaches could influence which stablecoins businesses choose to support or use.
Circle’s figures make its case that distribution and operating obligations consume a substantial share of revenue. Rivals’ offers, meanwhile, give potential partners a different economic proposition. The figures alone do not establish which model will prove more attractive: partner terms, redemption arrangements, reliability and compliance obligations also matter.
The competition is particularly relevant because Coinbase is both Circle’s largest USDC partner and a backer of Open USD. That overlap underscores how a company can maintain a major relationship with one stablecoin issuer while supporting an alternative network. The source does not report that Coinbase has ended or reduced its USDC partnership.
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USDC’s Partners and Alternatives
USDC is issued by Circle, whose business depends in part on distribution partners and activity involving the token. The CoinDesk report described the earnings on reserves as a point of competition between Circle’s model and networks that share some reserve income with participants.
Open USD was announced in June with a stated plan to support fee-free minting and redemption for businesses and distribute reserve income after a management fee. Another competitor identified in the report is the Global Dollar Network, led by Paxos, which also shares reserve income with participants. The report did not provide a full comparison of the networks’ terms, costs or performance.
Circle has also pursued additional distribution relationships. In September, Binance bought a $100 million stake in Circle under a five-year deal that includes a fee tied to USDC held through Circle’s wallet service, according to the report. That agreement is evidence of another commercial relationship, but the source does not say it resolves the broader competition over reserve income.
“The costs of redemption, compliance, and resilience don’t disappear just because the issuer declined to pay them.”
— Kash Razzaghi, Circle’s chief commercial officer
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Partner Terms Still Unclear
The report does not provide detailed financial terms for Open USD’s management fee or show how much reserve income its participants will receive. It also does not quantify the returns available through the Global Dollar Network or compare either model’s costs with Circle’s USDC economics on the same basis.
It remains unclear whether Coinbase or other partners plan to shift activity from USDC to competing tokens. Circle’s post did not name Open USD, and the reported figures do not show how its finances may change over time. The source also does not specify the exact settlement timing for the near-real-time redemption option Circle described for eligible customers.
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Competition for Stablecoin Partners
The next developments to watch are the terms and adoption of reserve-sharing networks, as well as any changes in distribution arrangements between Circle and its partners. Circle said qualifying platform customers and payment flows through its Circle Payments Network can access near-real-time redemptions at no cost; standard USDC redemptions remain free and typically settle within up to two business days.
Further disclosures from Circle, Coinbase, Open USD or other networks could clarify partner economics, fees and adoption. The source does not identify a specific upcoming announcement or deadline, so the scale and pace of any shift in stablecoin distribution remain uncertain.
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Key Questions
What did Circle say about its first-half 2026 finances?
Circle said it generated about $1.4 billion in revenue and kept about 7 cents in net profit per revenue dollar. It reported $819 million in distribution and transaction costs; the remaining $473 million covered compliance, liquidity and product development and included about $214 million in stock-based compensation and related costs.
What is Open USD?
Open USD is a stablecoin network backed by Coinbase, Stripe and BlackRock, according to the report. It aims to let businesses mint and redeem stablecoins without fees and pass reserve income to participants after a management fee.
Is Coinbase leaving its USDC partnership?
The report does not say that Coinbase is ending or reducing its relationship with Circle. It identifies Coinbase as Circle’s largest USDC partner and says the company also backs Open USD.
Does Circle charge for USDC redemptions?
Circle said standard USDC redemptions remain free and typically settle within up to two business days. It also said qualifying platform customers and payment flows through Circle Payments Network can access near-real-time redemptions at no cost.
What remains unknown about the competing models?
The report does not provide Open USD’s management-fee rate, the amount of reserve income participants may receive, or a comparable breakdown of competitors’ costs. It also does not establish whether partners will move activity away from USDC.
Source: rss
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