Circle is facing a growing debate over the economics of dollar-backed stablecoins as competitors explore ways to distribute more of their reserve income to businesses that help drive adoption. A recent post from Coin Bureau highlighted a striking figure: Circle retains approximately seven cents of every dollar under the financial breakdown being discussed, while the remainder goes toward distribution partners, transaction costs and other business expenses.

The debate comes as Open USD (OUSD), developed by Open Standard, promotes a different approach to stablecoin economics. Its model is designed to share most reserve earnings with participating businesses after a management fee, challenging the conventional approach in which the issuer retains a substantial portion of the income generated by backing assets.

The disagreement raises a fundamental question for the stablecoin industry: should the company issuing a dollar-backed token capture most of the economic value, or should the businesses distributing and using that token receive a larger share?

Circle's 2026 Financial Results Put Its Revenue Model in Focus

Circle, the issuer of USD Coin (USDC), reported approximately $1.395 billion in total revenue and reserve income for the first half of 2026. Its reported net income for the same period was approximately $103.5 million.

Those figures imply a net income margin of roughly 7.4%, providing context for the seven-cents-per-dollar headline. However, net income margin and a simplified breakdown of revenue spending are not exactly the same thing. Operating expenses, taxes and other accounting items can affect the final profit figure.

Circle's second-quarter results, announced on August 5, 2026, also highlighted the scale of its stablecoin business. The company reported $701 million in total revenue and reserve income for the quarter, while USDC in circulation reached $73.3 billion at the end of June.

On-chain USDC transaction volume rose to $14.8 trillion during the second quarter, according to the company's reported results. That growth demonstrates the scale of activity supported by the stablecoin, although transaction volume does not necessarily represent an equivalent amount of revenue earned by Circle.

Reserve income remains central to Circle's business model. The company earns income from assets backing USDC, while paying distribution partners and covering the costs of running its stablecoin infrastructure.

Where the Money Behind USDC Comes From

USDC is designed to maintain a value of one US dollar. Circle manages reserve assets intended to back the tokens in circulation, and those assets generate income.

The amount of income depends on several factors, including the quantity of USDC outstanding and the returns available on reserve investments. Interest rates and changes in the amount of USDC in circulation can therefore influence Circle's financial performance.

However, Circle does not keep every dollar generated by its stablecoin business. It pays distribution partners, incurs transaction-related costs and funds operations such as compliance, technology, banking relationships and customer support.

Distribution expenses are particularly important because stablecoins need broad acceptance to become useful payment instruments. Exchanges, payment providers and other platforms help customers access, transfer and spend digital dollars.

These relationships can be expensive, but they also help expand a stablecoin's reach. The challenge for Circle is balancing the cost of distribution with the revenue it retains from reserve assets.

The same economics create an opportunity for competitors. If businesses believe they can receive better financial incentives from another stablecoin, they may consider alternatives when selecting payment infrastructure.

Open USD Introduces a Different Stablecoin Revenue Model

Open USD, also known as OUSD, was introduced by Open Standard on June 30, 2026. The project promotes a model designed to return most reserve earnings to participating businesses after a management fee.

Open Standard's approach focuses on three broad ideas: reducing friction around minting and redemption, sharing reserve income with participating businesses and developing a collaborative governance structure.

The commercial argument is straightforward. Businesses that distribute stablecoins, process payments or bring new users into a network could receive a direct financial benefit from helping that network grow.

Under a traditional stablecoin arrangement, businesses may benefit from integrations, transaction services and commercial agreements, but they do not necessarily receive a direct share of the issuer's reserve income.

Open USD aims to change that incentive structure. If a payment provider can earn a share of reserve income by supporting OUSD, the stablecoin may become more attractive than a competing option offering less favorable commercial terms.

Nevertheless, the precise economics matter. Businesses must assess the management fee, eligibility requirements, reserve arrangements, redemption conditions and contractual terms before comparing potential returns.

A promise to distribute most reserve earnings does not automatically establish how much a particular participant will earn or whether the arrangement will remain competitive over time.

Why Coinbase, Stripe and BlackRock Matter

Open USD's development has attracted attention because of the established financial and technology companies associated with Open Standard.

Coinbase, Stripe and BlackRock have been named among the companies supporting or participating in the broader initiative. Visa and Mastercard have also been associated with the project.

Stripe announced on September 30, 2026, that OUSD was available to businesses using its platform. Stripe said eligible businesses could mint and burn OUSD without fees and become Open Standard partners to earn rewards for supporting the network.

This matters because payment infrastructure can influence which stablecoins businesses adopt. A digital dollar that integrates into existing systems and offers attractive commercial incentives may have an advantage when companies choose how to settle payments or manage digital-dollar balances.

Coinbase adds another layer to the discussion because it is an important distribution partner for Circle's USDC business while also being associated with Open Standard.

That overlap illustrates how interconnected the stablecoin industry has become. Companies can have commercial interests in an established stablecoin network while exploring competing products that could reshape the same market.

BlackRock is also relevant because of its role in the institutional investment infrastructure associated with USDC reserves. Its involvement in the wider stablecoin ecosystem reflects the growing connection between traditional asset management and digital financial products.

However, participation in Open USD should not be interpreted as evidence that Coinbase or BlackRock has abandoned Circle. Supporting a competing initiative does not, by itself, demonstrate that an existing commercial relationship has ended or is about to end.

Why Circle Is Challenging the Revenue-Sharing Approach

Circle's argument is that reserve income helps finance the infrastructure required to issue and maintain a stablecoin. That includes reserve management, compliance, security, redemption operations, customer support and technology development.

In the argument highlighted by Coin Bureau, Circle warned that a stablecoin distributing almost all its income could struggle to fund its own operations. The phrase "a stablecoin that distributes everything but funds nothing" captures the company's concern.

The underlying issue is how much revenue an issuer needs to retain to operate reliably. Stablecoin infrastructure requires ongoing investment, and the company responsible for issuing the token must maintain the systems and processes needed to support customers and fulfill its obligations.

If the issuer retains too little income, it could face pressure to reduce spending, introduce new charges or find alternative revenue sources.

Supporters of revenue sharing see the issue differently. They argue that businesses creating demand for a stablecoin should receive a greater share of the economic value they help generate.

For payment companies and large platforms, even a relatively small share of reserve income could become commercially meaningful if their transaction activity and stablecoin balances are substantial.

Both arguments depend on execution. A revenue-sharing stablecoin needs enough financial resources to maintain its operations, while an established issuer needs to offer partners compelling reasons to continue using its product as competition increases.

Does Free USDC Redemption Settle the Debate?

Circle has also highlighted its direct redemption arrangements as part of its response to stablecoin competition. Eligible customers can redeem USDC through supported arrangements without a direct redemption fee, subject to the relevant terms and requirements.

However, users should distinguish between issuer redemption fees and other costs. Blockchain network fees, intermediary charges and platform-specific conditions may still apply, depending on how a transaction is carried out.

Open USD also promotes zero-fee minting and redemption under its announced model. For businesses handling large payment volumes, these terms could help reduce certain transaction costs.

But fees alone do not determine which stablecoin offers the better commercial proposition.

Businesses must also consider liquidity, supported blockchain networks, settlement speed, regulatory obligations, redemption procedures, integration costs and reserve arrangements. A revenue-sharing agreement may be attractive, but its value depends on the full operational and financial picture.

USDC already has an established network and significant market usage. Open USD, meanwhile, is attempting to attract participants by changing the financial incentives associated with stablecoin distribution.

The competition will depend on whether the newer model can deliver meaningful benefits without creating unacceptable operational or financial risks.

What the Competition Means for the Stablecoin Industry

The debate over reserve income suggests that stablecoin competition is moving beyond the basic promise of maintaining a dollar peg.

As digital dollars become more integrated into payments, trading and financial applications, businesses are increasingly examining the economics of the networks they support.

Circle's financial results show the scale of the revenue opportunity and the costs associated with maintaining a large stablecoin business. Open USD is challenging the conventional model by proposing that businesses helping distribute a stablecoin should receive most of the income generated by its reserves.

If the approach attracts payment providers and other large participants, it could encourage established issuers to reconsider how they structure distribution agreements and commercial incentives.

However, revenue sharing alone may not be sufficient to persuade businesses to switch. Established liquidity, reliable redemption, regulatory compliance and broad acceptance remain important considerations for stablecoin users.

Circle's advantage lies in its existing network and institutional relationships. Open USD's proposition is that a different economic structure could make its network more attractive to businesses.

The outcome will depend on adoption, financial sustainability and the ability of each model to serve businesses reliably at scale.

For the wider crypto market, the dispute highlights a broader shift: stablecoins are no longer competing only over technology and dollar stability. They are also competing over who captures the financial value created by digital-dollar payments.

Frequently Asked Questions

What does Circle's seven-cents-per-dollar figure mean?

The figure refers to a simplified description of Circle's revenue economics. Its reported first-half 2026 net income of approximately $103.5 million compared with roughly $1.395 billion in total revenue and reserve income produces a net income margin of about 7.4%. This should not be treated as a complete breakdown of every dollar of revenue.

What is Open USD (OUSD)?

Open USD is a dollar-linked stablecoin developed by Open Standard. Its model is designed to share most reserve earnings with participating businesses after a management fee, with minting and redemption offered without fees under its announced terms.

Why is Open USD competing with USDC?

Both target digital-dollar payments, but their economic models differ. Circle earns substantial revenue from reserve assets, while Open USD aims to distribute most reserve income to businesses that help grow its network.

Are Coinbase and BlackRock leaving Circle?

Their association with Open Standard does not establish that either company has ended or plans to end its existing relationship with Circle. Participation in competing stablecoin initiatives can coexist with other commercial relationships.

Is USDC redemption always free?

Circle offers direct redemption arrangements without a redemption fee to eligible customers, subject to applicable terms. Third-party charges, network fees and platform requirements may vary.

Conclusion

Circle's response to the stablecoin revenue-sharing debate highlights the challenge of balancing issuer sustainability with partner incentives. The company argues that reserve income is needed to fund the infrastructure behind USDC, while Open USD is offering businesses a different way to participate in the economics of digital-dollar payments.

Neither model has an automatic advantage. Circle has an established stablecoin network and institutional relationships, while Open USD is attempting to attract participants with a different distribution of reserve income.

As competition develops, the deciding factors are likely to include financial sustainability, liquidity, redemption reliability, commercial incentives and adoption by businesses.

For the stablecoin industry, the central question is no longer just how to issue a reliable digital dollar. It is also how to distribute the economic value created by the network that supports it.

Sources

1. Circle — Second-quarter 2026 financial results: https://www.circle.com/pressroom/circle-reports-second-quarter-2026-results
2. U.S. Securities and Exchange Commission — Circle's second-quarter 2026 Form 10-Q: https://www.sec.gov/Archives/edgar/data/1876042/000187604226000248/crcl-20260630.htm
3. Open Standard — Introducing Open USD: https://joinopenstandard.com/blog/introducing-open-usd
4. Stripe — OUSD availability on Stripe: https://stripe.com/newsroom/news/ousd-is-now-available-on-stripe
5. The Block — Open USD and reserve revenue sharing: https://www.theblock.co/news/markets/2026-06-30-visa-stripe-coinbase-join-open-usd-stablecoin-shares-reserve-revenue-406736

Disclaimer: This article is for informational purposes only and is not investment advice. Stablecoins carry operational, regulatory, liquidity and other risks.