Original｜Odaily Planet Daily (@OdailyChina)
At the end of March, according to Fortune's report, the stablecoin issuer Circle has hired an investment bank to start preparing for its IPO, planning to submit its listing application to the SEC in late April; on April 1, Circle officially submitted its S-1 prospectus to the U.S. SEC, planning to list on the NYSE under the ticker symbol CRCL. Just as the market believed this move might mean that "the first crypto IPO after Trump's presidency" was a certainty, just a few days later, with the official start of Trump's tariff trade war, there were market reports stating that Circle would delay its IPO process. Thus, the question of which company will ultimately take the lead in crypto IPOs after Trump's administration aimed at establishing a crypto-friendly government remains unresolved.
Odaily Planet Daily will analyze the current state of the stablecoin market, trends in U.S. crypto regulation, and compare Circle's valuation system with other potential IPO crypto projects in this article.
Suspense 1: Can Circle claim the title of "the first stablecoin concept stock"?
To conclude, Circle is very likely to claim the title of "the first stablecoin concept stock."
The reasons are as follows:
1. Major competitors are not interested in taking the "IPO development route." Previously, after Circle submitted its IPO application, Tether's CEO Paolo Ardoino stated that Tether does not need to go public. (Note from Odaily Planet Daily: It is worth mentioning that Paolo's tweet included a photo of him with the Wall Street bull, implying a strong sentiment of "I don't need to talk to Wall Street investment banks about going public; rather, Wall Street investment banks need me.")
Tether CEO's bold statement
2. Circle firmly holds the second position among stablecoin issuers. According to Coingecko's information, USDC currently has a market capitalization of $60.14 billion, second only to USDT, which has a market capitalization of $144 billion, ranking sixth in the cryptocurrency industry by market cap.
3. Circle has a well-established compliance system, making it the "most compliant stablecoin issuer." It is understood that Circle is registered as a Money Services Business (MSB) in the U.S. and complies with relevant regulations such as the Bank Secrecy Act (BSA); it holds money transmission licenses in 49 U.S. states, Puerto Rico, and Washington D.C.; in 2023, Circle obtained a major payment institution license from the Monetary Authority of Singapore (MAS), allowing it to operate in Singapore; in 2024, Circle received an electronic money institution (EMI) license from the French Prudential Supervision and Resolution Authority (ACPR), enabling it to issue USDC and EURC in Europe under the EU's Markets in Crypto-Assets Regulation (MiCA). It can be said that USDC is one of the few stablecoins that operates compliantly in the U.S., Europe, and even Asia.
Therefore, based on the current progress of the IPO application submission and USDC's market position, as well as the attitudes of other competitors, Circle should be poised to secure the title of "the first stablecoin concept stock."
The next question is: Can Circle's main business support its market value post-IPO? The answer still needs to be found in Circle's IPO prospectus.
Suspense 2: Is Circle's USDC stablecoin a guaranteed profitable business?
Again, to conclude, at present, Circle's operational status does not seem particularly optimistic.
Previously, we conducted a detailed analysis of Tether, the dominant player in the stablecoin sector, in the article “The First Stablecoin USDT Hits New Highs, Unveiling the Billion-Dollar Business Empire Behind Tether”; in the article “7 Major Crypto Money-Making Machines: With Annual Profits of $14 Billion, This is the Ultimate 'Tax Officer' of the Crypto World”, we also analyzed Tether's nearly $14 billion annual profit and its small team of fewer than 200 employees, highlighting Tether's "high profit, small team" model that places it at the top.
However, Circle's IPO prospectus shows that its operational status is significantly different from Tether:
In terms of specific revenue: In 2024, Circle reported revenues of $1.68 billion, up from $1.45 billion the previous year, a year-on-year increase of 16.5%; however, its net profit fell from $268 million to $156 million, a year-on-year decrease of 42%. Part of the reason is the $908 million distribution cost paid to partners (including Coinbase and Binance).
In terms of reserve funds: Approximately 85% of USDC's reserves are invested in U.S. Treasury bonds (managed by BlackRock's Circle Reserve Fund), and about 20% is held in cash deposits within the U.S. banking system; in contrast, USDT's reserves are more diversified, including 5.47% in BTC.
Details of USDT's reserve funds
- In terms of personnel costs: According to the prospectus, Circle spends over $260 million annually on employee salaries and nearly $140 million on administrative expenses; depreciation and amortization expenses amount to $50.85 million, IT infrastructure costs are also as high as $27.1 million, and marketing expenses are around $17.32 million. It must be said that Circle's expenditure categories are far more complex than Tether's.
Circle's operational data over the past three years
Additionally, it is worth noting that Circle's revenue sources are far less than Tether's, with 99% of its revenue coming from reserve interest, approximately $1.661 billion; its transaction fees and other income amount to only $15.169 million.
**In other words, at this stage, Circle is engaged in a "deposit interest business," rather than being able to "earn from both ends" like Tether—earning from reserve interest while also charging service fees for fund redemptions. *It should be noted that the cross-border payment market is as large as $150 trillion, and currently, this market is primarily occupied by the more decentralized and less regulated USDT.*
In contrast, Circle is still constrained by "partners" like Coinbase and Binance.
Suspense 3: Will the ambiguous relationship with Coinbase continue?
The full name of the company behind Circle is Circle Internet Financial, Inc., originally founded by Jeremy Allaire and Sean Neville in 2013; the governance of USDC is managed by the Centre Consortium, which was jointly established by Circle and Coinbase. However, with the changing regulatory environment, in August 2023, Circle spent $210 million to acquire Coinbase's corresponding shares in the Centre Consortium, fully taking over the issuance and governance of USDC, but the 50%:50% revenue-sharing agreement between the two parties remains in effect.
Distribution cost information in Circle's prospectus
In 2024, of the $908 million distribution costs that Circle paid to Coinbase, according to Coinbase's previously released 10-K annual report, $224 million was rewarded to users in the form of staking rewards (holding USDC can earn a 4.5% yield, and there have been user reports of APYs as high as around 12%), with the remaining approximately $686 million belonging to Coinbase itself.
@0x_Todd's actual earnings and corresponding interface
Currently, this move may be understood as a "conspiracy" between Circle and Coinbase to expand the circulation market value and market share of USDC—that said, such a high stablecoin interest rate also raises doubts about whether Coinbase and Circle are laying the groundwork for the IPO, performing a "high-interest deposit" act for retail investors out of necessity.
Moreover, Circle's generous distribution benefits are not limited to Coinbase; Binance is also included.
Prospectus information shows that in November 2024, Binance became the first approved participant under Circle's stablecoin ecosystem protocol. According to the cooperation agreement, Binance is required to promote USDC on its platform and hold a certain amount of USDC in its financial reserves; Circle paid Binance a one-time upfront fee of $60.25 million and agreed to pay monthly incentive fees based on the USDC balance held by Binance. The incentive fees are only paid if Binance holds at least 1.5 billion USDC, while Binance commits to holding 3 billion USDC (with exceptions in specific circumstances). This cooperation is divided into two parts: market promotion and financial reserves, both for a two-year term. If Binance terminates the market promotion agreement early, it must still fulfill a one-year obligation to reduce fee payments and promotional duties. Both parties can terminate the agreement early under specific circumstances.
It is evident that Circle is well aware of the importance of rallying allies to expand its market base.
Additionally, in the past year, Circle has been active in the Solana and Base ecosystems; in the Solana ecosystem alone, according to incomplete statistics from Odaily Planet Daily, over 3.25 billion USDC have been issued since 2025, totaling 13 times, with a single issuance amount reaching as high as 250 million.
Incomplete statistics
On March 26, as the on-chain issuance of USDC surpassed $60 billion, according to TheBlock's statistics, the breakdown is as follows:
Approximately 36 billion issued on Ethereum;
About 10 billion on Solana;
Approximately 3.7 billion on Base;
About 2.2 billion on Hyperliquid;
Approximately 1.8 billion on Arbitrum;
About 1 billion on Berachain.
TheBlock's statistics on USDC issuance across chains
As of now, the circulation of USDC remains around $60 billion. According to DefiLlama data, the total market capitalization of stablecoins is approximately $233.535 billion, with a 7-day decline of about 0.58%; USDC's market share is around 26%.
Thus, we can tentatively conclude that Circle's future development still relies on Coinbase's support, and it may continue to "supply" around 50% of its distribution revenue to Coinbase.
Suspense 4: Will Circle be affected by U.S. stablecoin regulatory legislation?
In the prospectus, Circle mentioned potential risks related to regulatory legislation, such as U.S. regulatory agencies or legislation requiring stablecoin issuers with issuance amounts exceeding $10 billion to be banks or have bank affiliations.
Risk disclosure section of the prospectus
Based on existing information, the latest progress on U.S. stablecoin regulatory legislation is as follows:
In February 2025, U.S. Senator Bill Hagerty and others proposed the "U.S. Stablecoin National Innovation Guidance and Establishment Act" (GENIUS Act), aimed at establishing a federal regulatory framework for payment stablecoins. The bill stipulates that stablecoin issuers with a market capitalization exceeding $10 billion will be regulated by the Federal Reserve (FED), while smaller issuers may choose to operate under state-level regulation; all issuers must back their stablecoin issuance with high-quality liquid assets (such as U.S. dollars and Treasury bonds) on a 1:1 basis, and the issuance of algorithmic stablecoins is prohibited.
At the same time, U.S. Representative Maxine Waters proposed the "Stablecoin Transparency and Accountability to Promote Better Ledger Economy Act" (STABLE Act), which requires all stablecoin issuers to obtain federal licenses and be supervised by the Federal Reserve; this bill emphasizes consumer protection, requiring issuers to hold reserve assets equal to their issuance volume and comply with anti-money laundering (AML) and KYC regulations.
As a compliance leader in the stablecoin space, Circle is right to make necessary risk disclosures in this regard. Although there have been reports that "Tether is working with U.S. lawmakers to influence the regulation of fiat currencies," Circle, under the protection of allies like Coinbase and BlackRock, should be able to handle regulatory pressures without significant issues.
Therefore, the risks in this area are relatively controllable.
Suspense 5: What is Circle's valuation?
Although Circle's S-1 document does not provide a specific IPO fundraising price, based on secondary market trading, its current valuation is approximately $4-5 billion, with the equity structure divided into Class A (1 vote/share), Class B (5 votes/share, capped at 30%), and Class C (no voting rights), allowing the founders to retain control. The IPO will also provide liquidity for early investors and employees.
Compared to the previous high valuation of $9 billion during the last round of financing, this figure has been halved due to the stablecoin market share and recent market downturns, but there is still some profit potential.
In comparison, Coinbase's current stock price is reported at $151.47, with a market capitalization of approximately $38.455 billion; this is about 8-9 times that of Circle.
Additionally, the tariff trade war initiated by the Trump administration and expectations of interest rate cuts by the Federal Reserve may also impact Circle's revenue, which should be taken into account.
Whether Circle's diversified business can support the corresponding valuation remains to be seen.
Personally, I believe that compared to the more flexible use cases of USDT, USDC can only achieve greater development space when combined with U.S. bank-related businesses. Previously, U.S. banks Custodia Bank and Vantage Bank jointly issued the first U.S. bank-supported stablecoin, Avit, based on a permissionless blockchain on the Ethereum network, which may signal the intensifying competition in the stablecoin space.
If Circle wants to ensure its position as "the second stablecoin," it may need to learn from Tether's revenue-generating experiences in BTC reserves, redemption fees, and other areas.
Finally, a "surprise" from Circle's IPO prospectus—Circle officially mentioned that it is a "remote-first company," which poses higher operational and cybersecurity risks. Considering the $1.5 billion asset theft incident at Bybit in February and various security incidents caused by hackers represented by the North Korean group Lazarus, this risk warning may not be unfounded, but rather a risk factor that many crypto projects need to consider in advance.
Circle officially discloses remote work risks
Finally, I personally predict that Circle will conduct its crypto IPO earlier than other crypto companies like Kraken and Chainalysis, as for stablecoin companies with high operating costs and a singular narrative, reaching "outside investors" through an IPO is more urgent.
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