Compilation: Vernacular Blockchain

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Key Points

• On June 5, 2025, USDC issuer Circle successfully went public on the New York Stock Exchange, injecting new vitality into the entire stablecoin industry. With its vertically integrated product strategy and the United States' crypto-friendly political environment, Circle has attracted widespread attention from the market.
• While Circle is creating a buzz, people are beginning to look for the next potential winner under the GENIUS Act. FraxFinance, a stablecoin protocol with a similar strategy to Circle, is gradually becoming the focus of the industry with its frxUSD stablecoin, FraxNet front-end platform, and high-performance Blockchain Fraxtal.
• The three pillars of the financial system are currency, front-end, and back-end. From the perspective of the development of the financial industry, traditional inefficient back-end systems are gradually transitioning to Blockchain. In this trend, the stablecoin-based financial system is also composed of three parts: stablecoins, front-end, and Blockchain network. FraxFinance is one of the few protocols that builds these three key elements simultaneously, demonstrating a vertically integrated strategic direction.
• FraxFinance is at a turning point towards a new chapter. From the political influence of the founders participating in the drafting of the GENIUS Act, to the vertically integrated product vision achieved through the stablecoin operating system, and finally to the comprehensive transformation of the protocol through the Polaris upgrade, FraxFinance is more prepared than anyone to embrace the future envisioned by the GENIUS Act.

1. What is the secret to the successful listing of Circle?

The Victory of the Stablecoin Industry 1.1

On June 5, 2025, Circle went public on the NYSE under the ticker "CRCL", with an IPO price of $31 per share, higher than the initially expected range of $27-28, raising approximately $1.1 billion in total. The opening price on the first day of trading was $69, and the closing price was $83. By August 25, the stock price had soared to about $135, making it an extremely successful IPO case.

The listing of Circle is not only a milestone for a company, but also marks the ability of crypto companies to enter the traditional financial market under the backdrop of the passage of the GENIUS Act, the relaxation of SEC regulations, and the Trump administration's friendly policies towards cryptocurrencies. The enthusiastic response to Circle in the public market further proves that the stablecoin infrastructure can thrive in the traditional financial sector.

This is not only a victory for Circle but also a success for the entire stablecoin industry.

1.2 Circle's vertical integration strategy

Source: Circle Circle is one of the largest stablecoin issuers in the world, with USDC pegged to the US dollar and EURC pegged to the Euro. Driven by the mission to build a new financial system based on the internet, Circle offers a range of products, including:

• Circle Payments Network (CPN): Circle's global funds transfer standard, aimed at becoming a blockchain-based alternative to SWIFT. Financial institutions and businesses can efficiently handle cross-border remittances and settlements through CPN and multiple public Blockchains.
• Circle Mint: Integrates with traditional banking networks such as wire transfers and SEPA(, allowing businesses and institutional users to instantly mint and redeem USDC and EURC at a 1:1 ratio with fiat currency, serving as the only official issuance channel for USDC.
• Circle Wallets: Provides blockchain wallet integration SDK for Web2 companies, supporting account abstraction, MPC security, transaction broadcasting nodes, compliance options, and multi-chain support.
• CCTP: Circle's cross-chain messaging protocol that enables the secure transfer of USDC across different Blockchains through a burn and mint mechanism, addressing liquidity fragmentation issues.
• Circle Paymaster: An account abstraction feature based on ERC-4337 that allows users to pay blockchain fees in USDC or have them covered by the platform, enabling gasless transactions.
• USYC: By the end of 2024, Circle acquired the USYC issuer Hashnote. USYC is a tokenized money market fund investing in US Treasury bonds and reverse repos, providing institutional clients with stable on-chain yields and can be used as collateral for margin on trading platforms such as Deribit and BN.
• Arc: A USDC-specific L1 Blockchain launched in August, utilizing a high-performance consensus algorithm to optimize the usage experience of USDC.

Through these products, Circle not only issues stablecoins but also builds a stablecoin infrastructure that is convenient for institutional and retail users, covering issuance, wallets, cross-chain bridges, L1 networks, account abstraction, and institutional solutions, demonstrating a vertically integrated product strategy.

From the user experience perspective, Circle's product suite has significant advantages. Imagine a business using Circle's products: instant minting and redemption of USDC through Circle Mint; convenient stablecoin features for users unfamiliar with Web3 through Circle Wallets, Paymaster, and CCTP; efficient USDC usage enabled by the Arc Blockchain; and transactions and settlements with financial institutions and enterprises through CPN. The core of stablecoins lies not in issuance but in practicality. Circle's vertical integration strategy has laid the foundation for the widespread adoption of stablecoins in the real world and on-chain ecosystems.

) 1.3 Why is Circle attracting so much attention?

Why can Circle attract the attention of both the blockchain industry and traditional financial markets at the same time? In addition to product advantages, the following factors are also crucial:

• Passage of the GENIUS Act: As the first federal law in the United States to explicitly regulate U.S. dollar stablecoins, the GENIUS Act provides a framework for the legal status of stablecoins, issuer obligations, and consumer protection, making Circle's internal operating standards legal benchmarks, granting them legitimacy and compliance.
• Trump Administration's Pro-Crypto Policies: The Trump administration expressed strong support for cryptocurrencies even before taking office. On July 30, 2025, the Presidential Digital Asset Market Working Group released a 160-page report on crypto policy, proposing a roadmap to make the United States the global crypto capital.
• SEC Regulatory Easing: New SEC Chairman Paul Atkins takes a pro-crypto stance, with a more lenient regulatory attitude compared to former Chairman Gary Gensler. The SEC has launched the "Project Crypto" initiative to further clarify the regulatory rules for the U.S. crypto industry.
• Market Share: USDC is the second largest stablecoin globally, with a current supply of approximately $63 billion, accounting for about 30% of the stablecoin market. Due to the collateral composition of USDT not complying with the GENIUS Act, USDC has become the largest compliant stablecoin under U.S. regulation.
• Business Model: Circle generates its primary income by managing USDC reserves ###, which include government bonds, repurchase agreements, etc. In Q2 2025, Circle achieved revenue of $658 million, with an adjusted EBITDA of $126 million, demonstrating an attractive revenue structure and robust profit margins.

The current political environment in the United States provides an excellent stage for Circle's rise, while also laying the foundation for the rapid growth of the entire stablecoin industry.

( 1.4 The enthusiasm of South Korean investors

![])https://img-cdn.gateio.im/webp-social/moments-7cea93e87c3a37d072b47c939cdde1b3.webp###Interestingly, the craze for Circle has not only swept through the United States but also other countries. By June 2025, Circle(CRCL) became the most sought-after overseas stock among South Korean investors, with a net purchase amount exceeding $600 million, far surpassing the second-ranked Tesla 2X ETF( by 1.6 times), the third-ranked Coinbase( by 4 times), as well as Alphabet and Apple.

Why is Circle so popular in South Korea? In addition to the active participation of South Korean investors in U.S. stock trading, the deeper reason is that the interest in stablecoins in the South Korean market is rapidly increasing. In June 2025, the new President of South Korea, Lee, took office and announced support for the legalization of stablecoins, greatly stimulating market attention towards the stablecoin industry. Although South Korea has not fully realized the legalization of the won-backed stablecoin due to strict foreign exchange regulations, the conservative attitude of the central bank, and the small size of the short-term bond market, every time a company or institution applies for trademarks related to stablecoins, their stock prices soar, demonstrating that the stablecoin craze has expanded from the Blockchain industry to the general stock market.

2. Finding the next winner of the GENIUS bill

( 2.1 After Circle, who is next?

The successful listing of Circle has shifted the attention of enterprises and investors towards the stablecoin industry, looking for the next beneficiary under the GENIUS Act. Coinbase is often mentioned because Circle shares nearly half of its USDC reserve income with Coinbase. In the second quarter of 2025, Circle's reserve income was $634 million, of which $332.5 million was paid to Coinbase.

But apart from companies that indirectly benefit like Coinbase, are there any public companies that directly issue GENIUS Act compliant stablecoins like Circle? Unfortunately, there are no such companies in the US stock market at the moment. Paxos is the second largest stablecoin issuer in the US, but it is a private company.

) 2.2 On-chain Opportunities

Even if you can't find the next Circle in the stock market, there's no need to be disappointed. There are protocols on the blockchain that issue USD stablecoins in accordance with the GENIUS Act. Currently, there are two protocols dedicated to this: Ethena and Frax Finance.

![]###https://img-cdn.gateio.im/webp-social/moments-66fe65f605587b4a23ba1e28f653d608.webp###

Source: Ethena

Ethena: Ethena offers two stablecoins, USDe and USDtb. USDe does not comply with the GENIUS Act due to its reserves based on a delta-neutral strategy in the futures market, while the reserves of USDtb consist of the MMF fund BUIDL and stablecoins. In July 2025, the issuance of USDtb will be transferred from the British Virgin Islands to Anchorage Digital Bank to prepare for compliance with the GENIUS Act.

Frax Finance: Frax Finance issues the frxUSD stablecoin, with reserves consisting of USD MMFToken and US Treasury Fund Token. Founder Sam Kazemian is one of the key figures in drafting the GENIUS Act. In March 2025, he met with the bill's co-sponsor Senator Cynthia Lummis to provide advice on the bill, helping to establish the legal framework for the digital dollar. Frax Finance not only develops products but also actively participates in regulatory discussions, working with lawmakers to shape the regulatory framework, demonstrating a spirit of policy entrepreneurship. Due to the founder's personal involvement in the bill's drafting, Frax Finance's understanding of the GENIUS Act is unparalleled, and based on this, the frxUSD was designed.

3. frxUSD: The first GENIUS Act compliant stablecoin

( 3.1 Frax's Stablecoin Operating System

![])https://img-cdn.gateio.im/webp-social/moments-f4259697dcf61317421c2373ab8d79ef.webp###Frax Finance's goal is not only to reliably issue stablecoins but also to build a scalable infrastructure that can be widely used. To this end, Frax has launched a "stablecoin operating system" that includes three core products:

• frxUSD: A stablecoin compliant with the GENIUS Act, it is the core liquidity asset of the Frax ecosystem.
• FraxNet: A platform that allows users to issue and redeem frxUSD in multiple ways and earn stable returns by holding stablecoins in a non-custodial manner, in compliance with the GENIUS Act.
• Fraxtal: A high-performance EVM L1 Blockchain designed for frxUSD, using FRAX as the gasToken.

The issuance of stablecoins is certainly important, but practicality is even more crucial. Frax Finance not only issues compliant frxUSD but also provides a user-friendly front end called FraxNet, along with the Fraxtal ecosystem specifically designed for frxUSD. In this structure, frxUSD acts as the currency, FraxNet plays the role of fintech and banking, while Fraxtal serves as the backend of the financial system, together forming the core engine of the frxUSD ecosystem.

In addition, Frax Finance also offers services such as Fraxswap( trading), Fraxlend( lending), and frxETH( Ethereum liquid staking protocol), creating a complete stablecoin and DeFi ecosystem.

( 3.2 frxUSD: The first GENIUS Act compliant stablecoin

![])https://img-cdn.gateio.im/webp-social/moments-e35c92d97dd89474e29783430f612f5c.webp###

Source: GovInfoFrax Finance founder Sam Kazemian participated in the drafting of the GENIUS Act, and the team thus has an in-depth understanding of the legislation. Based on this regulatory expertise, Frax Finance began issuing the regulatory-compliant frxUSD in February 2025. So, what exactly makes a stablecoin compliant with the GENIUS Act? Is frxUSD truly compliant?

The full text of the GENIUS Act is available online, and here is a summary of the key requirements:

( 3.2.1 Issuance Qualification

Only authorized issuers within the United States can issue stablecoins. Authorized issuers are divided into three categories: subsidiaries of banks or credit unions, OCC-approved institutions, and institutions approved by state financial regulatory agencies. Frax Finance, through the FIP-432 governance proposal, has transferred the issuance, reserve management, and compliance responsibilities of frxUSD to FRAX Inc., a company registered in Delaware, which is currently preparing to obtain stablecoin issuance licenses from the OCC or state financial regulatory agencies.

) 3.2.2 Reserve Requirements

The GENIUS Act requires that stablecoin reserves be fully backed 1:1, with reserve assets limited to the following highly liquid assets:

1. US dollar or Federal Reserve account balance
2. Demand deposits, withdrawable deposits, insured deposits, or credit union shares
3. US Treasury bonds with a remaining or original term of 93 days or less
4. The issuer, as the seller, signs an overnight repurchase agreement, using government bonds with a term of 93 days or less as collateral.
5. The issuer signs an overnight reverse repurchase agreement as the buyer, using U.S. Treasury bonds as collateral.
6. Registered government money market funds or securities registered under the Investment Company Act of 1940, holding only the above assets.
7. Other highly liquid and stable assets directly issued by the United States federal government
8. The tokenized form of the above assets

![]###https://img-cdn.gateio.im/webp-social/moments-dd84fc694a3fc05f1df77cc7401d2a79.webp###frxUSD's reserves are entirely composed of Tokenized assets, including:

• USTB: The tokenized form of the short-term U.S. Treasury bond fund issued by Superstate.
• BUIDL: A tokenized form of the fund issued by BlackRock that invests in government bonds, cash equivalents, and repos.
• WTGXX: The tokenized form of the money market fund for short-term government bonds and government agency bonds issued by WisdomTree.
• USDB: A stablecoin issued by Bridge acquired by Stripe.
• USDC: A stablecoin issued by Circle.

The reserves of frxUSD are backed by over 100% collateral to meet the reserve requirements of the GENIUS Act, maintaining stable value.

( 3.2.3 Revenue Distribution

The GENIUS Act prohibits stablecoin issuers from paying interest to holders solely for holding or using stablecoins, to avoid confusion with deposit products. frxUSD complies with this regulation, and users holding frxUSD do not earn interest. However, users holding frxUSD on the FraxNet platform can earn stable returns generated by bonds. This does not violate the Act, as the returns are provided by FraxNet) operated by Frax Network Labs Inc., independently from the issuer###, and are not paid directly by the issuer. Similarly, Coinbase offers approximately 4.1% returns for USDC within the platform, and PayPal offers about 3.7% returns for PYUSD.

4. Frax Follows in Circle's Footsteps: Familiar Yet Unique

The success of Circle and Frax Finance's frxUSD feels familiar. The direction of Frax Finance in building a stablecoin ecosystem is highly similar to Circle, yet carries unique innovations.

( 4.1 Currency: Issuance of Stablecoins

Circle and Frax Finance both issue stablecoins that comply with the GENIUS Act, with reserves consisting of cash, short-term government bonds, and repurchases to maintain stable value, serving as the monetary foundation for the next-generation financial system. The difference is that the interest income from the frxUSD reserves is used for FraxNet holders, team operations, and FRAXToken holders, creating a positive cycle within the ecosystem, while the interest income from USDC reserves belongs entirely to Circle.

) 4.2 Frontend: User Experience

Circle provides a user-friendly front end through Circle Mint, Circle Wallet, and Circle Gateway.

![]###https://img-cdn.gateio.im/webp-social/moments-749f07ef7acb0dbeebe378e3e5a6a8a4.webp###

Frax Finance's FraxNet also provides similar functionality:

• Multi-asset issuance: Supports USDC, USDT, PYUSD, USDB, bank wire transfers and RWAToken issuance of frxUSD, similar to Circle Mint.
• Embedded Wallet: Automatically create a Blockchain wallet by logging in with accounts like Google, reducing the Web3 threshold, similar to Circle Wallet.
• Dashboard: Displays multi-chain assets and supports convenient transfers, similar to Circle Gateway.
• Passive Income: frxUSD holders on FraxNet can automatically earn bond yields, similar to the USDC yields on Coinbase.

FraxNet also plans to launch:

• Virtual Visa Card: Collaborates with Stripe and Bridge to support real-world payments.
• Virtual Bank Account: Collaborating with Lead Bank to provide deposit and withdrawal services through a traditional banking network.
• **FraxNet Mobile End: **Launching a mobile application in 2026, providing a complete mobile banking experience.

These plans aim to create a complete user interaction lifecycle, surpassing the experience of Circle Mint.

( 4.3 Backend: Blockchain infrastructure

An efficient backend is crucial for financial systems. In February 2024, Frax Finance launched the high-performance Blockchain Fraxtal optimized for frxUSD. Subsequently, Ethena's Converge, Tether's Stable and Plasma, and Circle's Arc were successively launched, demonstrating that Frax Finance is leading industry trends.

) 4.4 Stablecoin Trinity

![]###https://img-cdn.gateio.im/webp-social/moments-fe38c0dbd9732899c85c41c42fd8673a.webp###The three main elements of the modern financial system are currency, front-end, and back-end. In the future, the complex back-end will gradually shift to Blockchain, with stablecoins, front-end, and Blockchain networks becoming the core of blockchain-based financial systems. Frax Finance has built this "stablecoin trinity" through frxUSD, FraxNet, and Fraxtal, demonstrating a strategy of vertical integration.

5. Follow the North Star

Source: Frax Finance Since March 2025, Frax Finance has been preparing for the GENIUS Act upgrade through North Star, including renaming the original FRAX and FXSToken to frxUSD and FRAX, changing the gasToken of Fraxtal from frxETH to FRAX, and adjusting the Token incentive structure.

Frax Finance is entering a new chapter. From the founder's involvement in drafting the GENIUS Act, to achieving vertical integration through the stablecoin operating system, and finally to the comprehensive transformation brought by the North Star upgrade, Frax Finance is fully prepared for the future of the GENIUS Act.

Some believe that Frax Finance is imitating Circle, but the reality is quite the opposite. The launch of FraxNet and Fraxtal shows that Frax Finance is not just a follower, but a leader in setting the direction of the industry. Just as the North Star guides sailors, Frax Finance has upgraded to North Star, establishing a new benchmark for the industry, and will become a guiding light in the stablecoin sector in the future.

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