Circle has defended the economics behind USDC as OUSD challenges partner rewards. The company argues that its model already shares substantial revenue with firms supporting adoption.
Its explanation follows growing attention on Open USD and its partner-focused incentives. Competition now centers on fees, reserve earnings, and distribution across the stablecoin market.
Circle details how USDC revenue supports partners
Circle chief commercial officer Kash Razzaghi published the explanation on October 16 without naming competitors. However, the timing follows Open USD’s expansion across Stripe’s stablecoin infrastructure.
Circle reported approximately $1.4 billion in first-half 2026 revenue. Distribution partners and transaction costs received $819 million, representing 59% of the total.
The company allocated another $473 million, or 34%, to operations and infrastructure. Those expenses covered licensing, banking relationships, settlement liquidity, compliance, and blockchain development. Circle reported net profit equal to 7% of revenue.
According to Circle, more than 150 partners participate in USDC’s economic model. Participants include exchanges, wallets, banks, and payment companies.
Circle also defended its redemption arrangements against the emerging competition. Customers can redeem USDC through standard banking channels without fees, with settlement taking up to two business days.
Meanwhile, Circle Payments Network participants and businesses building on its platform can redeem without charges through near-real-time, around-the-clock settlement. Circle said first-quarter redemptions reached $71.8 billion, roughly 90% of circulating supply at that time.
OUSD challenges stablecoin fees and reserve earnings
The Open Standard Consortium introduced OUSD on June 30 with free minting and redemption, without volume limits. It also offered partners reserve earnings after deducting a small management fee.
Stripe integrated OUSD throughout its stablecoin stack on September 30. Stripe highlighted zero minting and burning fees plus rewards linked to activity and balances.
OUSD remains substantially smaller than USDC. CoinMarketCap figures put USDC supply near $72.6 billion, while OUSD represents roughly 1% of that amount.
Still, OUSD’s launch prompted market concerns about Circle’s competitive position. Circle shares fell approximately 13% following the announcement and its proposed reserve-revenue sharing structure.
Circle chief executive Jeremy Allaire welcomed competition around the launch. Dragonfly’s Rob Hadick identified potential pressure on Circle’s business, while Clear Street’s Owen Lau considered the selloff excessive.
Lau cited consortium-backed USDG from Paxos, which had reached only approximately $3 billion in supply. The OUSD consortium counts over 140 supporting companies, including Stripe, Coinbase, Visa, Mastercard, and BlackRock.
Coinbase and Binance lead USDC distribution rewards
Although Circle distributes rewards across numerous partners, larger distributors receive greater payments. Circle cited Coinbase’s second-quarter results.
Coinbase averaged $20 billion in USDC across its products, exceeding 30% of quarter-end supply. Circle said Coinbase captured roughly half of USDC’s economic rewards over the preceding year.
Binance also maintains a major commercial relationship with Circle. The exchange invested $100 million in Circle and signed a five-year promotional agreement.
Under that agreement, Circle pays Binance a monthly fee to promote USDC. These arrangements show how distribution agreements shape Circle’s revenue allocation as OUSD pursues the same partners.
