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Circle just pulled off one of the hottest IPOs of the year.
Itâs nearly tripled on day one.
The deal was 25Ă oversubscribed.
Why all the excitement over a company that makes... a $1 coin?
Welcome to the strange and powerful world of stablecoinsâcryptoâs most misunderstood corner, and maybe its most useful one.
Stablecoins like USDC arenât about moonshots or meme hype. Theyâre designed to stay exactly where they are: $1.
And yet, theyâve processed trillions in volume, become the backbone of DeFi (Decentralized Finance) and cross-border payments, and are now central to the US governmentâs plan to regulate digital money.
So what exactly is a stablecoin?
Why did Circle become a Wall Street darling overnight?
And why should you care about a crypto token thatâs... intentionally boring?
Letâs break it down.
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đ° A Dollar That Doesnât Flinch
In a world where Bitcoin can drop 10% before lunch, stablecoins are built to⌠not move. At least, not in price.
A stablecoin is a digital token pegged to a stable asset, usually the US dollar. One USDC = $1. Always. Thatâs the promise.
But how?
Behind every USDC is real moneyâa dollar (or short-term US Treasury) held in reserve. When you give Circle a dollar, they issue one USDC. When you redeem it, they give your dollar back and burn the token.
It's a simple idea with massive implications:
đ Global reach: Anyone with internet access can hold a dollar-backed asset without needing a US bank account.
⥠24/7 transfers: Unlike bank wires, stablecoins settle in seconds. No weekends. No holidays.
đ Programmable money: Developers can build apps that move dollars as easily as data.
Itâs like putting the dollar on internet railsâand suddenly, money moves at the speed of software.
No wonder fintechs, payment networks, and crypto protocols are racing to plug into it.
đ Circle: The Company Making It Work
Circle is the company behind USDC, the second-largest stablecoin, with around $61 billion in circulation, trailing only Tetherâs USDT at over $155 billion.
While Tether dominates by size, Circle is betting on something else: trust.
Where Tether has long faced criticism for its opaque reserve disclosures and offshore operations (now based in El Salvador), Circle has leaned into transparency, US regulation, and Wall Street partnerships.
Itâs not trying to be the biggest stablecoin.
Itâs trying to be the most trusted one, especially by regulators, institutions, and fintechs building on crypto rails.
So what exactly is Circleâs role?
đ It mints and redeems USDC. When a customer sends $1 to Circle, they get 1 USDC. When they send back the USDC, they get $1 in return. No gimmicks, no partial backingâjust a tight, transparent peg to the dollar.
đ It safeguards reserves. Circle holds that money in cash and short-term US Treasuries, managed in part by BlackRock. The reserves are audited and publicly attested monthly, unlike its larger rival, Tether.
đ It earns interest. Hereâs the business model kicker: Circle earns yield on the dollars it holds. As interest rates rise, so do Circleâs earnings. In 2023, it reportedly earned hundreds of millions in revenue, largely from Treasury income.
đ It provides infrastructure. Circle isnât just minting coins. Itâs building a platform. From APIs that power crypto wallets and fintech apps, to integrations with Visa, Coinbase, and Stripe, Circle is quietly becoming the backend of the âinternet dollar.â
Instead of trying to be the next PayPal, they want to be what PayPal plugs into.
Circleâs business model is deceptively simple: They earn interest on the billions of dollars backing USDCâand theyâre very efficient at it.
As the visual shows, $1.7 billion of Circleâs FY24 revenue came from reserve income, while âother revenueâ (such as API services or platform fees) was just a rounding error.
The real eye-opener? Circle turned that into $167 million in operating income, with a tidy 9% margin. Despite over $1 billion in partner feesâprimarily to Coinbase, which earns a 50% share of net USDC revenueâCircle is solidly in the green.
Most of the USDC reserves arenât Circleâs corporate assets.
They are held off-balance sheet, in the Circle Reserve Fund managed by BlackRock.
This fund is legally separate and custodied by BNY Mellon.
The fundâs assetsâUS Treasuries and some cashâback the USDC in circulation, but donât belong to Circle in the way that operating capital does.
As a result, $50+ billion in reserve assets (as of May 2025) show up in disclosures, attestations, and footnotes, but not in Circleâs balance sheet.
đ§ The takeaway: Stablecoins arenât just digital dollars. When done at scale, they become interest-bearing machines.
đ Mind-Blowing Numbers
Circle isnât building some experimental crypto toy. Itâs operating at real-world scale: