Circle · Coinbase · CryptoSlate
USDC’s 72% surge exposed the expensive truth behind Circle’s stablecoin dominance
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Circle incurred $1.4 billion in distribution costs connected to Coinbase in 2025, up from $924.5 million the year before, according to the company's own 10-K filing.
Key facts
- USDC circulation grew 72% year over year to $75.3 billion in the fourth quarter, and full-year revenue and reserve income climbed 64% to $2.7 billion
- Circle's sensitivity analysis, which holds USDC circulation and reserve allocation constant, estimates that a 100-basis-point rate increase would add $756 million to reserve income and $369 million
- Circle incurred $1.4 billion in distribution costs connected to Coinbase in 2025, up from $924.5 million the year before, according to the company's own 10-K filing
- Assuming the entire $6.16 billion stablecoin base qualifies as aligned supply and earns a 3.5% reserve yield, it would generate about $215.6 million in annual gross reserve income
Summary
01 Circle paid $1.4 billion in Coinbase-linked distribution costs in 2025, even as USDC circulation rose 72% to $75.3 billion. 02 Those costs now consume most reserve income, leaving Circle with a 39% margin and less of each USDC dollar. 03 Circle’s 2026 Coinbase renewal and growing Hyperliquid-style demands will determine whether its retained share keeps shrinking. Those distribution costs equaled roughly 51% of its total 2025 revenue and reserve income.