Stablecoin issuer Circle is defending its business model as major distribution partners back competing networks designed to give businesses a larger portion of interest earned from stablecoin reserves.
In a blog post published on Friday, Chief Commercial Officer Kash Razzaghi stated that Circle retained approximately 7 cents in net profit for every dollar of revenue generated during the first half of 2026. Out of $1.4 billion in revenue, distribution and transaction costs accounted for $819 million.
The remaining $473 million went toward compliance, liquidity, and product development, a figure that included roughly $214 million in stock-based compensation and related expenses. Circle argued that reserve income is necessary to fund ongoing operations, noting that standard USDC redemptions remain free and typically settle within two business days.
“The costs of redemption, compliance, and resilience don't disappear just because the issuer declined to pay them,” Razzaghi wrote.
The defense comes as Coinbase, Circle's largest USDC partner, backs Open USD alongside Stripe and BlackRock. Launched in June with a live OUSD token, Open USD is a rival network that allows businesses to mint and redeem stablecoins without fees while passing reserve income to participants after a management fee. Other competitors, such as the Paxos-led Global Dollar Network, also share reserve income with participants.
Amid these competitive pressures, Circle has continued to expand its partnerships. In September, Binance purchased a $100 million stake in Circle as part of a five-year agreement featuring a fee tied to USDC held through Circle's wallet service. Additionally, Circle noted that qualifying platform customers and payment flows through the Circle Payments Network can access near-real-time, zero-cost redemptions.
