Circle defends USDC economics as rivals court its partners
Circle is pushing back on rival stablecoin networks offering partners a bigger share of reserve income, and its biggest partner, Coinbase, backs one of them.
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Key takeaways
- Circle is defending how USDC revenue is shared as rivals pitch partners a larger cut.
- Coinbase is Circle's largest USDC partner.
- Coinbase also backs Open USD, a rival network.
- Open USD passes reserve income to partners after taking a management fee.
Circle is defending the economics of USDC while rival stablecoin networks try to pull its distribution partners away with a bigger slice of the money. Here's the awkward bit: one of those rivals is backed by Coinbase, Circle's largest partner.
What's on the table
The dispute is about reserve income. Issuers hold cash and similar assets behind every token, and those assets earn returns. The commercial question that matters is how much of that return goes to the companies distributing the coin.
Open USD, the rival network Coinbase backs, takes a management fee and then passes the reserve income to its partners. That's the pitch. A larger cut for the firms that bring in users.
Why Coinbase matters
Coinbase is Circle's biggest USDC partner. It backs a competing network while distributing USDC, and that gives it leverage. It also gives Circle a reason to explain its own terms in public. The source material doesn't spell out what Circle's current arrangements look like, so I won't guess at them.
Why it matters
If you hold or use USDC, this is a fight over who gets paid, not over how the coin works day to day. But distribution drives stablecoin adoption. If partners can earn more elsewhere, they have a reason to push other tokens inside their apps and exchanges. Watch two things: whether Circle changes its terms, and whether Coinbase shifts volume toward Open USD. Either would tell you more than any statement will.
Source: CoinDesk
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Daniel tracks crypto regulation and policy across the US, EU and Asia, with a decade in financial journalism.
