Circle shows where USDC money goes: $819M to partners

Circle has put numbers on where USDC money goes for the first time. Of $1.4 billion in first-half 2026 revenue, $819 million went to distribution and transaction costs, leaving about 7 cents of net profit per dollar. For partners looking to earn on stablecoin reserves, that is a weighty argument in a fast-growing dispute.

What exactly Circle showed in its blog

On Friday, Circle Chief Commercial Officer Kash Razzaghi laid out the company's cost structure for the first half of 2026 in a blog post. Revenue came to about $1.4 billion. Of that, $819 million, or roughly 58%, went to distributing USDC and covering transaction costs.

The remaining $473 million paid for compliance, liquidity and product development. That sum includes about $214 million in stock-based compensation and related costs. After all deductions the company kept about 7 cents of net profit per dollar of revenue, CoinDesk reports.

Few issuers go into this much detail. Circle shares (CRCL) closed Friday at $82.25, down 5.43%.

Who is pressing on the revenue-sharing model

Circle's largest USDC distribution partner, Coinbase, backs a rival. Open USD was unveiled in June, and Stripe and BlackRock joined the project. The OUSD token is already live. Businesses can mint and redeem it without fees, while reserve income minus a management fee goes back to network participants.

There are other examples. The Global Dollar Network, with its USDG token led by Paxos, also shares reserve income with participants. Circle did not name Open USD in its post, but the target is obvious.

The market has long known that a stablecoin earns on interest from its reserves. What is new is that partners can now choose who splits that interest more generously. For Coinbase it is a comfortable position: it sits on both sides of the table.

How Circle answers the criticism

The company fights back with numbers and cost logic. Reserve income also has to pay for redemption, compliance and a liquidity cushion. If the issuer does not pay for those, the costs do not vanish. They land on someone else.

"The costs of redemption, compliance, and resilience don't disappear just because the issuer declined to pay them."

- Kash Razzaghi, Chief Commercial Officer at Circle, from a Circle blog post dated October 16, 2026

Standard USDC redemptions remain free and typically settle within two business days. Qualifying platform customers and payment flows through Circle Payments Network now get near-instant redemption at no cost.

Circle is collecting partners in parallel. In September, Binance bought a $100 million stake in the company under a five-year deal that includes a fee tied to USDC held through Circle's wallet service. The company has also said it plans to enter 40 new markets. Each one needs local partners, which means new distribution payouts.

Risks for people who hold and trade USDC

For holders of USDC there is no direct threat. Reserves stay reserves. But the market structure may shift, and that will affect the price of services around the token.

• If partners move to networks with a bigger share, Circle will have to either pay more or lose distribution volume.
• A larger partner share will squeeze the issuer's margin, which is only about 7 cents per dollar right now.
• Businesses accepting stablecoins will choose between free minting and redemption on one network and proven infrastructure on another.
• Competition for partners could speed up fee cuts across the whole industry.

For people swapping USDC and Tether (USDT) for hryvnia at Ukrainian exchangers, the issuers' dispute does not change the rate directly. The spread there depends on demand and liquidity, not on deals between Circle and its partners. Still, if the market fragments across several networks, users will get more options and more reasons to compare rates.

Other pressure also affects growth speed. Earlier this week the BIS calculated that higher bank deposit rates slow the flow of money into stablecoins. So issuers have to compete with banks and with each other.

How the fight over reserve income may end

The cost breakdown showed that Circle has little room for concessions. Holding the margin at 7 cents while handing partners more will not work. The next quarterly report will show whether the partners' share changed after the Binance deal and the arrival of Open USD.