Stablecoin Wars Escalate: Circle Forms a USDC “Shadow Alliance” with Exchanges

CircleThere is new movement again.

On July 9, CoinDesk cited sources reporting that Circle has partnered with the world’s second largest crypto exchange.BybitSilently reachedUSDCRevenue sharing agreement. This is another transaction for Circle in expanding the usage scenarios of USDC, following those with Coinbase and Binance.

At the same time, Circle and OKX also announced a partnership to provide a 1:1 USDC fiat exchange channel for its 60 million users. Just a few weeks ago, Circle completed its IPO and was listed on the New York Stock Exchange, with a current market capitalization exceeding $44 billion.

Behind a series of high-frequency actions is Circle’s attempt tostablecoinThe ambition to play a bigger role in the market. But in this beingTetherIn a market that is long-term dominant and where the compliance path is yet to be clarified, it is still too early to conclude whether Circle’s route truly has an advantage.

Bybit Protocol: Continuing the old path of “dividing profits for promotion”

According to insiders, the general model of the agreement between Circle and Bybit is that the more USDC held by Bybit, the more revenue share from Circle’s reserve interest they can receive.

This set of gameplay is actually not new. Circle has long been bound to Coinbase in a similar way, paying over $60 million in cooperation fees to Binance, with monthly revenue linked to the USDC balance, calculated based on a certain SOFR interest rate standard.

At first glance, Circle’s use of “interest” to buy “market share” seems like a win-win situation. However, upon closer inspection, this is essentially a trade-off of profits for growth, where the source of the interest comes from U.S. Treasury yields rather than user transaction fees.

This incentive mechanism also has some issues:

Sustainability of growth is in doubt: current US Treasury rates are above 5%, and Circle has enough room to distribute profits. However, once interest rates decline and profit margins shrink, will the platform still be willing to promote USDC?

Weak partnership: Binance has previously adjusted its support for USDC due to regulatory risks, indicating that this partnership is not strong.

The power of traffic is not in the hands of Circle: the real customers are in the hands of the exchange, and Circle is always in a relatively passive position.

Using income to “buy channels” to some extent indicates that USDC has not yet formed a true market inertia.

OKX Collaboration: Strengthening the Key Infrastructure for “USD Going Abroad”

The cooperation between Circle and OKX involves providing a one-to-one USDC to USD deposit channel. This collaboration is not just about the convenience of exchanging; it is a core piece of Circle’s construction of a “global dollar router”:

In countries without local USD accounts, USDC has become a tool for non-US users to access USD assets.

OKX serves as a local traffic entry point, facilitating fiat deposits and on-chain circulation.

Circle acts as the “stablecoin central bank” for clearing, settlement, and reserves.

As USDC becomes a globally interchangeable expression of the dollar, its network effects and the speed of reduced transaction friction will exhibit exponential growth.

The more realistic question is:

Do users really need to exchange USDC for USD? Within the exchange, USDC is essentially a “pricing unit.” Most users hold it primarily to participate in crypto trading, rather than to frequently exchange it with fiat currency.

Therefore, OKX’s collaboration is part of the “compliance narrative” rather than a key factor in directly increasing USDC’s market share.

The stock price performance is stable, but the valuation implies risks.

The current price of CRCL is approximately 199 USD, with a nearly 80% increase over the last 30 days. Analysts have differing opinions on its future trend.

Seaport Research gave a “Strong Buy” rating on June 20, with a target price between $215 and $250. However, analysts from institutions like JPMorgan, Goldman Sachs, and Mizuho predict that its stock price could fall to the range of $80 to $85, citing increasing market competition and the potential challenges that the adoption of Central Bank Digital Currencies (CBDC) worldwide may pose to Circle’s international expansion. Nevertheless, 12 analysts on Wall Street generally give it a “Hold” rating, reflecting the market’s complex sentiment regarding its prospects.

However, it is worth noting that the current market valuation of Circle resembles a bet on the future regulatory framework for stablecoins. If the Federal Reserve or the Treasury tightens regulations, or if a competitor finds a new breakthrough, Circle’s business model will still face pressure.

Moreover, Circle’s high valuation includes expectations for it to “become the global infrastructure for stablecoins,” which is not a story that can be realized in the short term.

The fierce competition in the stablecoin market

For Circle, the biggest competitor is undoubtedly Tether (USDT).

According to the latest data, Tether’s USDT remains the market leader. A report from Finery Markets shows that despite a significant gap with USDT, USDC grew 29 times in institutional OTC trading volume in the first half of 2025, indicating a strong trend of institutional adoption.

At the same time, the market has also seen the emergence of new stablecoin projects, including Global Dollar (USDG) supported by Robinhood, which promote their own adoption through built-in revenue-sharing mechanisms. USDG was launched in the European Union on July 1, 2025, and is collaborating with numerous industry partners such as Kraken, Mastercard, and Paxos, attempting to create an open network that rewards participants.

In the face of competition, Circle not only relies on its existing advantages but is also actively exploring diversified sources of income, such as the Circle Payments Network launched earlier this year, which aims to provide instant stablecoin settlement services for banks, neobanks, and digital wallets to reduce its single reliance on reserve interest income.

If Tether is the dominant force born from the gray market, then Circle is building a new order of stablecoins that is financial infrastructure-oriented.

In the future competition, it may ultimately not be about “which stablecoin is bigger,” but rather who can become the core router of the US dollar internet; whoever does will have the authority in global trading.

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