Backing the Buck: Circle Internet Group's Business Model and the Economics of USDC

Circle Internet Group Inc. (Circle) debuted on the New York Stock Exchange on June 5, 2025, reaching a $63 billion valuation. As the issuer of USDC, Circle managed $65 billion in digital dollars, generating revenue primarily through interest on US Treasury reserves. However, the company faced a fundamental dilemma: high interest rates drove profits but increased the opportunity cost for users, while falling rates squeezed margins. Additionally, Circle had to navigate a complex revenue-sharing pact with Coinbase Global Inc. and competition from Tether Limited. Using Circle's financial statements and accounting for the impact of the GENIUS Act and the operational risks highlighted by the Silicon Valley Bank collapse, a financial analyst had to assess the sustainability of Circle's business model and the risks it faced. Sa-Pyung Sean Shin is affiliated with National University of Singapore;Seil Kim is affiliated with Baruch College-City University of New York