Circle generated roughly $1.4 billion in revenue in the first half of 2026, but its net margin stood at just 7 cents per dollar of revenue. Distribution and transaction costs accounted for the largest share, totaling $819 million of that top line. Outside distribution expenses, the remaining $473 million went toward funding compliance operations, liquidity, and product development, including approximately $214 million in stock-based compensation.
The financial figures reveal tangible pressure behind the scenes of stablecoin issuance: Circle’s thin margins are now directly up against rival business models that offer distribution partners a bigger cut of reserve yields.
Why Partners Are Eyeing Other Networks
Coinbase stands as Circle’s largest USDC distribution partner. Even so, the US-based crypto exchange is now also backing Open USD (OUSD), a rival network that employs a different economic structure. OUSD passes reserve interest income to network participants after deducting management fees, charging neither minting nor redemption fees.
Backing for Open USD bolsters the new network’s standing. Alongside Coinbase, the OUSD token is already live with support from payments company Stripe and asset manager BlackRock. Competition is intensifying further as the Paxos-led Global Dollar Network (USDG) employs a similar scheme, sharing reserve income directly with partners.
Circle’s Rebuttal and Binance’s Bet
Facing rivals’ maneuvers, Circle issued a response via its official blog without mentioning Open USD directly. Circle Chief Commercial Officer Kash Razzaghi reinforced the company’s argument regarding operational expenses that cannot simply be ignored. Razzaghi wrote: “Redemption, compliance, and resilience costs do not disappear just because an issuer chooses not to pay for them.”
Addressing liquidity, Circle stated that standard USDC redemptions remain fee-free and typically settle within two business days. Customers on certain platforms and transactions through the Circle Payments Network can now even access near-instant redemptions at no charge.
Institutional commitment to Circle has not entirely faded. Last September, Binance acquired a $100 million stake in Circle under a five-year agreement. The deal includes fees tied to USDC tokens held by users via Circle-owned wallet services.
For industry players and distribution partners, this rivalry presents two fundamental choices: chase more generous reserve yields from newer networks, or stick with an ecosystem featuring battle-tested compliance infrastructure.
Reported by CoinDesk.
Read also: What Is DeFi (Decentralized Finance)?
Previously: Circle Expands Into 40 Emerging Markets to Chase Tether - While Prepping Dollars for AI Agents
Disclaimer: This article is for informational and educational purposes only, not financial advice. Cryptocurrency assets are highly volatile and carry significant risk. Always do your own research (DYOR) and never invest more than you can afford to lose.
