#分享美股交易赢英伟达股票 What is the future of digital currency? Circle: Building trust with US Treasuries, a good business earning interest on zero-coupon bonds

Business Model
Circle is a digital dollar issuer built on blockchain, serving as a payment network, a money market fund manager, and crypto infrastructure software. Its profit model is relatively simple: users deposit 1 dollar, Circle issues 1 USDC and holds 1 dollar in reserve, used to purchase short-term US Treasuries, earning interest. After deducting distribution costs, remaining profits go to Circle.
The company's revenue mainly comes from interest income generated by USDC reserves invested in US Treasuries, accounting for about 99% of total revenue in 2024. It experienced significant losses in 2022 due to crypto market cycles and asset devaluation; profitability improved in 2023–2024, mainly benefiting from high US dollar interest rates; in 2025, net profit is distorted by IPO SBC and convertible bonds, with actual operating profit being quite high. Gross margin is not high; core costs include distribution partner commissions, reserve management costs, and compliance technology operations.
Although revenue grew in 2024, Coinb's share and channel fees grew even faster, eroding profits. Cash flow performance is more stable than net profit, reflecting that it is essentially a lightweight asset financial platform.
Key Indicators
From a financial company's perspective, USDC is essentially an interest-free liability. Circle’s profitability mainly depends on USDC circulation volume, US interest rates, and the share of revenue retained by Circle, with a simple formula: profit ≈ USDC volume × interest rate × Circle’s retention ratio. Additionally, its business model has a flywheel and network effects: growth in USDC volume enhances liquidity, attracting more developers and applications, further driving USDC growth.
Market Position
USDC holds about 28% of the stablecoin market share, ranking second, with the main competitor USDT (Tether) still much larger in scale.
Main Customers
Circle hardly engages in consumer marketing; its model is B2B2C, with Coinb as its most important partner. Major clients include:
Cryptocurrency exchanges and brokers;
Wallets, payment companies, fintech firms;
Cross-border trade and remittance institutions;
DeFi protocols and on-chain applications;
Institutional investors;
Corporate treasury departments;
Developers and Web3 companies.
Core Value: More Efficient Global Payments
Traditional US dollar payment systems have several pain points: slow cross-border transactions, high costs, banking hours restrictions, multiple intermediary banks, uneconomical small-value global payments, and lack of compliant USD assets in on-chain finance.
Circle’s role is to turn US dollars into on-chain liquid assets, solving how to use USD for global, low-friction, programmable, near real-time settlement.
Specifically, traditional SWIFT systems only handle message verification and transmission, but fund flows depend on intermediary banks confirming transfers layer by layer, creating an inefficient system of SWIFT messaging + intermediary bank network. Stablecoins leverage blockchain technology to enable fund transfers directly from wallet A to wallet B, without intermediaries, correspondent banks, clearinghouses, or banking hours, allowing funds and information to move simultaneously.
SWIFT’s high cost stems from its network of correspondent banks built to foster mutual trust among global banks, whereas blockchain relies on technology itself to establish trust.
Founders and Development History
Since its inception, Circle has been quite different from most crypto companies. Jeremy Allaire aims to accelerate global currency circulation and rebuild an open, internet-based alternative financial system using blockchain. Jeremy’s main views include:
The internet needs a native currency layer: just as the internet has information protocols, it also needs open value transfer protocols.
USD stablecoins will become the infrastructure of the global digital economy: USDC is not just a crypto trading tool but a chain-based USD used by global enterprises, developers, and financial institutions.
Regulatory compliance is a prerequisite for scaling stablecoins: without compliance, stablecoins will struggle to enter banking, payments, capital markets, and corporate treasury scenarios. Early on, Circle engaged in consumer Bitcoin payments, trading, OTC, and other businesses, gradually focusing on stablecoins. Once USDC’s reserve interest model matured, it achieved stable profitability.
In 2022, events like FTX, Terra, and Three Arrows Capital caused trust in the entire crypto industry to collapse, with a crypto bear market, declining on-chain activity, and significant losses for Circle.
In 2023, Circle had some reserves stored at Silicon Valley Bank. After SVB’s collapse, market concerns about USDC reserve safety led to USDC briefly falling below $1, and some users shifted to USDT. However, ultimately, US regulation and banking system rescue stabilized the situation, and USDC regained its peg.
Summary
Circle’s growth benefits from the digitization of the dollar, legalization of stablecoins, and upgrades in payment infrastructure; its biggest historical challenges mainly stem from regulation, crypto cycles, and banking system risks.
Risks
Regulatory risk: changes in stablecoin legislation could reshape business models.
Competitive risk: USDT, traditional mainstream banks issuing stablecoins, and related crypto industry risks such as bull-bear cycles, trust collapse, and quantum computing.
Coinb’s dominant entry channels divert significant profits; declining US base interest rates reduce income and profits; credit risk of reserve assets: in 2023, Circle was impacted by the Silicon Valley Bank incident, and USDC briefly de-pegged.