Circle defends USDC economics as stablecoin rivals court its partners with bigger cut

Circle, the issuer of the USDC stablecoin, is facing increased competitive pressure as rival networks offer more lucrative financial terms to key distribution partners. Coinbase, Circle's largest USDC partner, has also backed Open USD, an alternative network that passes a larger share of reserve income directly to participants after deducting management fees. In response, Circle defended its economic framework, highlighting the importance of regulatory compliance, deep liquidity, and institutional trust. The race for stablecoin dominance highlights the high stakes involved in capturing reserve yields and payment volume across decentralized finance. As traditional and crypto-native firms vie for market share, profit margins on stablecoin issuance are coming under scrutiny. Industry participants anticipate further consolidation and strategic alliances as issuers fight to retain their core distribution networks.