How does the stablecoin company Circle make money?

It is difficult for ordinary people to make money through stablecoins, and I will talk about the reasons in this issue.

After the last video was released, some friends privately messaged me asking how to make money using stablecoins. In fact, making money with stablecoins is not suitable for ordinary people; it is a game for large institutions.

But this does not prevent us from understanding how this business, which even the Trump family is eager to get involved in, actually works.

It just so happens that Circle, a stablecoin company, has recently been listed on the U.S. stock market, and if we look directly at its statements, Circle makes money mainly on the interest of reserves.

As soon as I say it, you will understand that users buy USDC from Circle, and the ratio of USDC to the US dollar is 1:1, and for every USD 1 USDC that users buy, Circle will get 1 USDC, which is called USDC's US dollar reserve, and Circle will invest this money in low-risk assets such as US Treasury bonds to earn interest.

Friends who are familiar with finance will definitely feel a sense of familiarity; isn't this the reserve fund for third-party payments? Yes, that's absolutely right. As we all know, before the introduction of the reserve fund management measures, payment companies like Alipay could deposit the reserve funds in banks to earn interest. This is actually a very good business because the more idle funds there are, the more interest can be earned.

In 2024, Circle's total revenue was approximately $1.676 billion, with a net profit of about $156 million, 99% of which came from interest income on reserves.

Therefore, how much money Circle can make depends, on one hand, on how widely it can expand the network of the USDC stablecoin and how many people use USDC, which determines the scale of its reserves. On the other hand, it also depends on the interest rates in the United States. A high interest rate environment will amplify Circle's earnings. From 2022 to 2024, the Federal Reserve's interest rate hikes led to an increase in short-term Treasury yields, significantly boosting Circle's reserve income.

Speaking of Circle, let's shift our focus to the entire market. In terms of the US dollar stablecoin market, it is currently in a dual oligopoly era. Currently, the number one is USDT issued by Tether, with a market cap of approximately $155 billion and a market share of over 60%. The USDC issued by Circle is the second largest US dollar stablecoin, with a market cap of approximately $61.5 billion and a market share of 26%.

There are also some new entrants. For example, the Trump family's World Liberty Financial has just entered the US dollar stablecoin market, issuing USD1, with a market cap of about $2.2 billion in 2025, ranking third, but significantly behind USDT and USDC.

Therefore, this market is currently in a limited oligopoly competition state, as this highly profitable interest-earning good business, although the model is simple, has a high entry barrier, suitable for the powerful and wealthy capital. We ordinary people might as well look for other opportunities.