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Circle said it retained about 7 cents of net profit for each dollar of revenue in the first half of 2026, after $819 million went to distribution and transaction costs. Its defense comes as Coinbase and other firms back rival stablecoin initiatives that pass some reserve income to participants; the precise terms and economic effects of those competing models remain important points of comparison.
Circle defended how it distributes revenue from USDC on Friday, saying it retained about 7 cents in net profit per revenue dollar in the first half of 2026 as rival stablecoin projects backed by some of its partners offer participants a share of reserve income. The dispute centers on who receives interest generated by assets backing stablecoins and who pays for redemption, compliance and liquidity.
In a 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. Circle said another $473 million went toward compliance, liquidity and product development; that amount included about $214 million in stock-based compensation and related costs.
The company’s post did not name Open USD, a rival initiative backed by Coinbase, Stripe and BlackRock. Unveiled in June, Open USD is designed to let businesses mint and redeem stablecoins without fees while passing reserve income to participants after a management fee. Its OUSD token is now live, according to the report. The Paxos-led Global Dollar Network, associated with the USDG token, is another competitor that shares reserve income with participants.
Circle said standard USDC redemptions remain free and typically settle in 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. The company’s explanation presents redemption and operational spending as part of the economics that must be considered alongside reserve income.
The Fight Over Stablecoin Reserve Income
The disagreement could affect how businesses and platforms choose which stablecoins to support. A model that distributes some reserve income may be attractive to partners seeking revenue from stablecoin activity, while Circle argues that the issuer also has costs tied to making the system work. Those competing approaches put partner incentives and operating costs at the center of competition for adoption.
Coinbase’s role is particularly relevant because it is Circle’s largest USDC partner and also backs Open USD. That does not, by itself, show that Coinbase is reducing its USDC support or that Open USD will replace it. It does mean Circle faces competition from a project supported by an established distribution partner, as well as from other reserve-sharing networks.
The financial figures Circle disclosed provide a snapshot of its reported economics, not a full comparison with competitors. The $473 million figure covers several categories and includes stock-based compensation and related costs. The source material does not provide comparable revenue, cost or participant-return data for Open USD or USDG, so it is not possible from these figures alone to determine which model offers partners better overall economics.
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Circle’s Partners Back Competing Models
USDC is a stablecoin issued by Circle and backed by reserve assets. Interest earned on those reserves has become a point of competition as other issuers and networks seek to attract businesses and distribution partners by sharing some of that income. Such arrangements may apply different fees and eligibility rules, so the headline idea of “sharing reserve income” does not establish what any particular participant will receive.
Circle has also been pursuing additional distribution relationships. In September, Binance bought a $100 million stake in the company under a five-year agreement that includes a fee tied to USDC held through Circle’s wallet service, according to the report. That deal is separate from the dispute described in Circle’s post, but it illustrates the commercial importance of distribution arrangements as stablecoin projects compete for partners.
Circle’s argument is that the interest generated by reserves cannot be viewed only as income available for distribution: the issuer must also pay for redemption, compliance and liquidity. Razzaghi wrote, “The costs of redemption, compliance, and resilience don’t disappear just because the issuer declined to pay them.” The statement gives Circle’s rationale; it does not establish how the costs or returns compare across competing projects.
“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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Terms and Partner Choices Remain Unclear
Circle’s post, as described in the report, did not directly address Open USD by name. It is not clear whether Circle’s disclosed figures are intended as a point-by-point comparison with the rival or as a broader explanation of its own cost structure. The available material also does not detail how Open USD’s management fee is calculated or what reserve-income share individual participants may receive.
There is no indication in the report that Coinbase has ended or changed its USDC partnership with Circle. Nor does the source provide evidence that Open USD or USDG has displaced USDC at any specific platform. Comparable financial and redemption data for the competing arrangements are not given, leaving their relative costs, returns and service performance unresolved.
Circle’s figures are company-reported results for the first half of 2026. The source does not provide further detail on the calculation behind the stated 7 cents of net profit per revenue dollar, beyond the reported revenue and expense amounts. How the company’s economics may change as distribution deals and competition develop is also unknown.
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Watch for Partner and Redemption Updates
The next indicators will be whether Circle’s partners change their distribution arrangements, whether Open USD publishes further details on fees and reserve-income payments, and whether competing issuers disclose comparable operating figures. Circle’s stated redemption terms may also draw attention as businesses compare service speed and cost across stablecoin options.
For now, the disclosed numbers explain Circle’s case for retaining revenue to fund operations, while rival projects are seeking to attract participants by sharing reserve income. The report does not establish that any partner has changed its USDC support or identify a decision date for future changes.
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Key Questions
What did Circle say about its USDC economics?
Circle said it retained about 7 cents of net profit per revenue dollar in the first half of 2026. It reported about $1.4 billion in revenue, $819 million in distribution and transaction costs, and $473 million for compliance, liquidity and product development, including stock-based compensation and related costs.
Why are stablecoin partners discussing reserve income?
Interest earned on assets backing stablecoins can be a source of revenue. Some competing projects, including Open USD, aim to pass some reserve income to participants after a management fee. Circle argues that issuers also have costs for redemption, compliance and liquidity.
Is Coinbase leaving its USDC partnership?
The report does not say that Coinbase is ending or reducing its USDC partnership. It identifies Coinbase as Circle’s largest USDC partner and says Coinbase also backs Open USD.
Are USDC redemptions free?
Circle said standard USDC redemptions remain free and typically settle in 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.
Which stablecoin model gives partners more income?
The source does not provide comparable payout, fee or operating-cost data for Circle, Open USD and USDG. Open USD says it will pass reserve income to participants after a management fee, but the reported material does not specify individual participant returns.
Source: rss
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