Circle: Stablecoins are a winner-take-all business. We will not slow down.

Author: Jeremy Allaire, CEO of Circle; Translation by Jiahuan, ChainCatcher

Our investor community has raised many questions about OUSD and wants to hear our perspective, so I'd like to share my thoughts directly here for your reference.

The stablecoin network is a business of platforms and network effects that takes a long time to build, and market structures often tend toward winner-take-all, similar to other internet platform infrastructure markets. Several layers are driving this.

First, stablecoin networks essentially act as public protocols and software layers on the internet, and their network strength depends on the number and breadth of applications and services connected to the network. Whenever a developer or service provider connects, it brings more network effects.

This attracts more developers, adds more utility, and generates more network effects. This in turn drives demand for the digital currency itself, further reinforcing these network effects through liquidity network effects.

Today, we have achieved this at a massive scale through the USDC network: thousands of services are connected to our network, which not only brings immense utility to each application but also greatly benefits overall users from this coverage and interoperability. This further strengthens user and developer preference for USDC.

We have spent nearly a decade building this ecosystem, and now with mainstream institutions connecting to the network and linking their customers and users, this process is accelerating.

We are also further expanding and strengthening the network by building a software stack, such as protocols like CCTP and Gateway, which enhance interoperability, security, and liquidity on a global scale. This expands the reach for application developers, allowing them to easily tap into existing liquidity and network effects.

Today, we see this software stack being widely adopted by various chains, permissioned L2s, government-led networks, and more.

The second layer is liquidity network effects. This is fundamental. Liquidity begets more liquidity.

For a stablecoin to achieve scale and utility, it must have high liquidity, including primary market liquidity (e.g., covering all major financial market centers globally with world-class direct bank connectivity) and secondary market liquidity, meaning it is accessible and tradable in every region globally for both retail and institutional clients against every fiat instrument.

People who want to acquire and transfer value need to be able to easily enter and exit this digital currency. In this regard, we have spent nearly a decade building this liquidity, which is now deeply embedded in exchanges, DeFi venues, payment service providers, payment companies, regional exchanges, and many other channels.

Building these liquidity network effects also involves constructing a global regulatory infrastructure to ensure the stablecoin can be used under different regulatory regimes worldwide.

Today, USDC is among the top three most liquid digital assets globally, with a sharp drop-off after that. BTC, USDT, and USDC have exceptionally strong liquidity.

The closest other dollar stablecoin is about ten times smaller in scale, and its liquidity is often concentrated on a single exchange's promotional order book, whereas USDC's liquidity is broadly distributed across dozens of different trading venues. Building this liquidity is a nearly decade-long effort that we continue.

The third layer of network strength comes from deep integration with policy and regulatory environments. In many cases, this requires years of effort to obtain licenses (for example, USDC is currently the only major global stablecoin usable across Europe and Japan), and more and more stablecoin regulatory frameworks are being implemented, with Circle leading to ensure USDC receives official recognition, registration, licensing, and acceptance in the world's most important markets.

Behind this is the work of building a global bank, reserve management, treasury, and liquidity management system that can operate nearly around the clock in global markets and banking systems. This global effort is a massive investment we have made over many years.

All of these investments by Circle and our global ecosystem of thousands of partners ultimately result in providing the world with the most trusted and accessible digital dollar infrastructure, which any user, developer, or business can freely and easily access. And we have no intention of slowing down.

All of this compounds over time and is reflected in the data. According to Artemis, a third-party analytics firm tracking stablecoin adoption, in Q1 2026, USDC processed nearly $30 trillion in on-chain transactions, accounting for 80% of all dollar stablecoin on-chain transactions. USDT handled the remaining 20%.

All other dollar stablecoins combined processed 0% (i.e., less than 0.5%) of the total transaction volume. Other stablecoins may have some circulating supply, but most of it comes from promotions and incentives, with actual usage extremely limited because these coins have very limited liquidity and network utility.

However, my thinking on the competitive landscape is not just about our network's strengths, but also some considerations about any new initiatives themselves.

Several perspectives and positioning have been shared externally about how products like OUSD could improve upon products like USDC.

1. Free minting and redemption. This argument suggests that existing stablecoins charge redemption fees, and payment companies should not have to pay for this (even though the entire payment industry is built on charging small basis point fees at various entry and exit nodes of the network).

There are some structural market realities that have formed around the fact that certain stablecoins charge high redemption fees and have limited redemption channels. The impact is that stablecoins with strong redemption channels, good liquidity, and no fees end up being the exit ramp for competitor stablecoins.

Claiming to offer unlimited, free redemptions sounds easy, but market realities are likely to force you to do otherwise. This problem can be solved, and Circle handles it through contractual mechanisms rather than a blanket fee waiver.

2. Everyone wins, everyone shares. This sounds good in principle, but the reality of the market and market opportunities is quite different. Today, Circle distributes most of its revenue to its distribution partners, and we continue to aggressively expand partnerships with leading companies in various market segments.

However, we also retain a significant portion of revenue to invest in the massive market infrastructure that makes USDC a powerful and valuable foundational tool upon which the world can build. Giving away all revenue would starve the infrastructure, lead to systemic underinvestment, and ultimately keep your platform confined to a very small scope.

Furthermore, Circle believes that the future stablecoin market size is likely to be several orders of magnitude larger than today. We are actively bringing partners into the USDC ecosystem through diverse and growing cooperation models, covering exchanges, custodians, payment companies, asset issuers, and more.

We are excited to continue building with an "all rivers flow to the sea" mindset, allowing the entire ecosystem to grow value together.

3. A consortium where everyone has a voice. Maybe I'm a bit pessimistic, but consortium-type products have a terrible track record when it comes to achieving scale, product-market fit, or even basic product agility. While there are financial consortia that operate infrastructure, their sluggishness is predictable.

A large group of big companies coming together suffers from poor coordination, misaligned incentives, slow progress, and rarely leaves room for truly lasting innovation and competitiveness. They also tend to "starve" the consortium operationally out of their own self-interest.

In the early days of USDC, we actually tried this approach, and even with a very small group, we encountered endless difficulties and complexities.

Smaller, tighter strategic collaborations and business cooperation arrangements with product and platform builders who can move forward independently almost always outperform large consortia in competition.

But when such consortia are formed, everyone often feels they should put their logo on the list, take a stance, show support, and loudly proclaim openness. Yet usually these companies will still let their business units make optimal decisions for customers, which often means partnering with market leaders to build lasting win-win relationships.

There has also been much commentary about the partnership between Circle and Coinbase and what it all means. Our collaboration with Coinbase on stablecoins remains as strong as ever, and I believe both sides see tremendous opportunities to expand the USDC network in the future.

One final point: Circle has always been committed to supporting various products and infrastructure, even where other areas of our business may compete with certain aspects of these partner products. In the case of OUSD, we work closely with many of its founding members, and we expect these members to continue being important partners and customers of USDC.

At the same time, as Circle continues to enrich our product and platform matrix, expanding into areas like Arc, CCTP, CPN, StableFX, Agent Stack, and more, we are also continuously expanding our cooperation with dozens of other stablecoin issuers, helping them issue on Arc, leverage our interoperability infrastructure, gain support from our wallets, and become settlement and forex options on CPN and StableFX.

We are firmly bullish on the growth of the stablecoin ecosystem and welcome OUSD as a new member of this community!