Introduction

Founded in 2013 and headquartered in Boston, USA, Circle is a leading global fintech company dedicated to serving enterprises and individuals through blockchain and digital currency technologies. Circle is the issuer of the USDC stablecoin (and the euro-backed EURC). As of 2025, USDC has a market capitalization of approximately $61 billion, making it the second-largest stablecoin globally after Tether’s USDT. The widespread use of USDC positions Circle as a critical infrastructure provider in the crypto industry, attracting significant attention from regulators and investors alike.

• Founding Background: Circle was founded by Jeremy Allaire and Sean Neville. Initially offering peer-to-peer digital payments via Circle Pay, the company pivoted to stablecoin issuance and crypto financial infrastructure.
• Stablecoin Status: USDC adopts a 1:1 USD reserve model, enabling convenient cross-border payments and asset management. By 2025, the global stablecoin market exceeds $240 billion, with USDT and USDC accounting for roughly 90% combined.

Business Model and USDC Mechanism

Circle’s primary business involves issuing the USD-pegged USDC stablecoin and investing the corresponding fiat reserves into low-risk assets to generate yield.

• Stablecoin Issuance: When users purchase USDC, equivalent USD is deposited into Circle’s accounts, and USDC is minted accordingly. Upon redemption, users can exchange USDC back to USD at a 1:1 ratio. USDC circulates on multiple blockchains (e.g., Ethereum, Solana), enabling real-time on-chain settlements.
• Reserve Management: Circle invests reserves in a portfolio of highly liquid, low-risk assets, including U.S. Treasury bills, overnight repurchase agreements, and bank deposits. According to Circle’s 2024 financial report, approximately 99% of its revenue came from reserve interest income ($1.676 billion total revenue, with $1.661 billion from reserves).
• Transparency and Audit: USDC operates on a full-reserve basis, with reserves segregated from Circle’s operating funds. Weekly reserve disclosures and monthly audits by top accounting firms (e.g., Deloitte) verify that reserves are equal to or greater than the circulating USDC. For example, Deloitte audits USDC reserve reports (as of April 13, 2025).

Comparative Analysis: USDC vs Other Stablecoins

USDC is not the only player in the stablecoin market. It operates within a highly competitive and increasingly diverse ecosystem. Understanding USDC’s unique value requires comparing it with USDT, DAI, and new entrants like USD1.

Stablecoin Comparison Table

USDC vs USDT: Regulation and Transparency

USDC vs USDT: Regulation and Transparency

Despite USDT’s dominance in market capitalization, USDC is widely regarded as superior in terms of compliance and transparency. Monthly reserve reports from auditors and adherence to U.S. regulatory standards have earned USDC higher trust among governments and institutional clients.

By contrast, USDT’s transparency has frequently been questioned. Investigations and penalties from the U.S. CFTC and NYAG in 2021–2022 have caused conservative investors to prefer USDC for trading pairs and as a safe-haven asset.

USDC vs DAI: Centralization vs Decentralization

DAI, developed by MakerDAO (now rebranded as Sky), is a decentralized stablecoin backed by on-chain collateral. It offers permissionless and censorship-resistant properties and is widely used in DeFi lending protocols. However, DAI faces “centralization compromises” due to its heavy reliance on USDC as collateral.

This dependency became evident during the 2023 USDC depegging incident, prompting MakerDAO to initiate decentralization plans such as Spark Protocol and the Endgame Plan. Nevertheless, DAI’s current stability is still largely underpinned by USDC, blurring its status as a truly independent decentralized stablecoin.

USDC vs USD1: Newcomers and Strategic Differences

USD1, launched by DWF Labs in late 2024, is a next-generation stablecoin project focused on “Real World Assets (RWA) + Stablecoin Issuance.” Backed entirely by U.S. Treasury assets and combining CeFi custody with on-chain issuance, USD1 aims to establish a multi-layered settlement system centered around exchanges.

图源：https://www.gate.com/trade/USD1_USDT

Although still small in market cap, USD1 is rapidly gaining traction on platforms like Gate, demonstrating strong resource integration. Fundamentally, USDC represents “fiat digitization” based on the U.S. banking system, while USD1 aligns more with “custodial credit” in CeFi environments. For USD1 to pose a serious challenge to USDC, it must match or exceed in areas like regulatory approval, reserve trust, and market depth.

USDC’s Strategic Role in a Multi-Stablecoin Landscape

As the stablecoin landscape becomes increasingly fragmented, USDC is positioning itself as one of the most compliant and trusted options, with a growing focus on governments, banks, cross-border payments, and enterprise clients. Although it may not be the most liquid stablecoin, it is likely the most institutionally trusted.

In the coming years, regulatory frameworks such as MiCA in the EU, U.S. stablecoin legislation, and central bank digital currency (CBDC) trials will require USDC to operate strictly within legal boundaries. Consequently, Circle will need to deepen collaborations with regulators, auditors, and traditional financial institutions, rather than relying solely on growth within the crypto-native ecosystem.

Stablecoin Market Share Pie Chart (June 2025 Estimate) (Source: Gate Learn creator Max)

• USDT (~$112B): Approximately 68% of the market
• USDC (~$32B): Around 19%
• DAI (~$5B): About 3%
• Others (incl. USD1): Approximately 10%

Technology and Compliance Strategy

Circle is actively building a blockchain-based open payment network while emphasizing regulatory compliance to earn institutional trust.

• Technical Innovation: Circle launched the Circle Payment Network (CPN), leveraging USDC/EURC to connect global financial institutions for compliant, real-time cross-border settlements. CPN is designed to replace the traditional SWIFT system, using blockchain as a settlement layer to reduce cost, improve speed, and support programmability. Over 20 institutions (e.g., WorldRemit, Yellow Card, Fireblocks) have joined CPN, with Standard Chartered and Deutsche Bank serving as advisors.
• Regulatory Licensing: Circle prioritizes compliance and has obtained financial licenses in multiple jurisdictions. Its subsidiary, Circle Internet Financial, LLC, holds a BitLicense and money transmission license from the New York Department of Financial Services (NYDFS). It also maintains Money Transmitter Licenses across various U.S. states and complies with AML and KYC requirements. Its EURC stablecoin complies with the EU’s MiCA regulation, requiring reserves backed by euro-denominated assets.
• Compliance Advantages: Circle’s transparency and proactive regulatory stance set a standard for the stablecoin industry. Its commitment to quarterly audits contrasts with the selective disclosures of competitors like USDT, helping attract institutional capital and ease regulatory concerns.

Development History and Funding

Circle started as a Bitcoin payment application and evolved through multiple funding rounds and milestones to become a stablecoin powerhouse.

• Early Stage and Funding: Founded in 2013, Circle raised $60 million in its Series D round in 2016, led by IDG Capital. In 2018, it secured an additional $110 million in Series E funding, led by Bitmain, with participation from Accel, IDG, and others.
• Launch of USDC: In 2018, Circle partnered with Coinbase to co-found the Centre Consortium and launched the USDC stablecoin. The consortium managed the USD deposits collectively and introduced a centralized, compliant USD-backed token.
• Subsequent Funding: In May 2021, Circle announced a $440 million raise from investors including Digital Currency Group (DCG), Fidelity, and FTX. These funds were used to scale the USDC ecosystem and services.
• SPAC Listing Attempt: In 2022, Circle planned to go public via a SPAC merger with a valuation of $9 billion. However, the deal was canceled in December 2022. CEO Allaire expressed disappointment but reaffirmed their commitment to eventually listing.
• Full Control of USDC: In August 2023, Circle acquired the remaining 50% stake in Centre from Coinbase for approximately $209.9 million in stock, taking full control of the USDC framework. Centre was dissolved in December 2023 and absorbed into a wholly owned subsidiary.
• Financial Performance: As of March 2025, Circle managed USDC reserves of approximately $59.976 billion (monthly average: $54.136 billion). Revenues grew from $772 million in 2022 to $1.676 billion in 2024, driven by interest income. Net profits were -$38.1 million (2022), $269 million (2023), and $167 million (2024), indicating a turnaround to profitability.

Latest IPO Milestone

On June 5, 2025, Circle successfully listed on the New York Stock Exchange (NYSE) under the ticker “CRCL,” becoming the first public stablecoin issuer.

• IPO Pricing and Size: Circle issued 34 million Class A shares at $31 each (above the expected $27–28 range), raising approximately $1.1 billion from the company and existing shareholders. The pre-IPO valuation was around $6.9 billion ($8.1 billion on a fully diluted basis). JPMorgan, Goldman Sachs, and Citi acted as lead underwriters.
• Key Investors: Prominent institutions like ARK Invest committed to purchasing up to $150 million worth of shares. Blackstone Group aimed to buy about 10% of the offering. The IPO saw over 25x oversubscription, reflecting strong investor interest.
• First Day Performance: Circle’s stock opened at $69 and closed at $83.23, representing a 168% gain and a market cap of nearly $18 billion (fully diluted). Trading was halted multiple times due to volatility. The strong debut is viewed as a positive signal for other crypto firms considering the U.S. IPOs.
• Significance: Circle’s listing is the largest crypto IPO since Coinbase (2021) and the first among stablecoin issuers. The IPO provides access to public capital markets and greater transparency, signaling growing mainstream acceptance of digital assets.

Impacts on the Crypto Industry, Regulation, and Investors

Circle’s IPO and USDC’s rapid growth have wide-ranging implications for crypto markets and financial ecosystems.

• Boost to the Crypto Sector: Circle’s successful IPO is a confidence boost for the crypto industry. Analysts expect more high-quality crypto firms to follow suit, attracting traditional capital and lowering fundraising barriers. A wave of stablecoin issuer listings could broaden market investment options.
• Market Transparency and Trust: As a public company, Circle must meet rigorous disclosure standards, enhancing USDC’s transparency. Compared to USDT’s selective disclosures, Circle’s transparent model may become an industry benchmark. The IPO and U.S. regulatory support are signs of mainstream crypto acceptance.
• Regulatory Trends: The U.S. Congress is advancing stablecoin legislation. The GENIUS Act, already passed in the Senate, mandates 1:1 USD backing and bans interest payments on stablecoins. It requires that payment stablecoins be backed by U.S. Treasuries—linking stablecoin issuance directly to Treasury demand. In Hong Kong, new 2025 regulations require full reserve backing and licensing. These developments may favor USDC’s compliance edge but impose profit constraints.
• Fintech and Payments: Circle’s blockchain-based payment network aims to replace traditional cross-border clearing systems. If widely adopted, USDC could become a key tool for institutional payments. Large banks and fintechs are testing stablecoin use cases. Analysts forecast the stablecoin market could reach the trillion-dollar range by 2030 under clear regulations—positioning Circle’s infrastructure as a major force in digital dollar transformation.

USDC Advantages and Risks

Advantages:

• High Transparency: Regular reserve disclosures and third-party audits.
• Broad Circulation: Multi-chain and institutional adoption across exchanges and DeFi platforms.
• Yield Mechanism: Low-risk asset yield allows competition with traditional banking returns.
• Efficient Payments: Combines USD price stability with blockchain’s speed and programmability for remittances, clearing, and collateral use.

Risks:

• Policy and Interest Rate Risks: Circle’s income is rate-sensitive. Fed rate cuts could slash reserve yields. The GENIUS Act’s ban on interest to users further limits revenue models.
• Regulatory Uncertainty: Global regulations are evolving. Future rules (e.g., capital requirements, whitelist restrictions) may raise compliance costs and limit operations.
• Security and Technical Risks: Despite high-quality reserves, financial entities face operational risks. In 2023, $3.3 billion in Circle reserves were briefly frozen due to SVB’s collapse, highlighting custodial and liquidity vulnerabilities.
• Confidence Risk: USDC’s value depends on Circle’s operational credibility. Audits reflect point-in-time data, not full risk exposure. A loss of trust—even with compliant operations—can trigger depegging.
• Competition: Alternatives like USDT, BUSD, DAI, and CBDCs pose threats. USDC’s superior compliance may not shield it from price-based or policy-driven market share shifts.
• Investor Considerations: The IPO provides retail access to the stablecoin economy, but volatility remains. CRCL shares surged on day one, but future performance depends on USDC adoption, regulation, and macro trends. Overreliance on interest income makes it sensitive to monetary policy shifts. Caution is advised.

Conclusion

As a pioneer in the stablecoin industry, Circle is driving stablecoins into mainstream finance while navigating macroeconomic and regulatory challenges. Its future depends on balancing innovation with compliance, expanding USDC’s use cases, and managing reserves prudently. In the global digital currency race, Circle’s moves are closely watched and could shape the future of crypto and payment infrastructure. For investors and the industry alike, Circle represents both an opportunity and a case study in navigating the digital finance frontier.


References
[1] Circle releases white paper on “Stablecoin Payment Network”
[2] Transparency & stability
[3] Circle sprints to the New York Stock Exchange: valuation of US$7.2 billion IDG and Accel are shareholders Roadshow PPT exposed
[4] Stablecoin giant Circle’s shares surge in blowout NYSE debut