Circle's 7-cent margin vs rivals' free model
Circle says it kept 7 cents per revenue dollar in H1 2026, as Coinbase backs a rival stablecoin network offering partners a bigger cut.
Circle is publicly defending how it splits stablecoin reserve income, after its biggest distribution partner started backing a rival that promises to hand more of that income back.
Chief Commercial Officer Kash Razzaghi wrote in a Friday blog post that Circle kept roughly 7 cents in net profit for every revenue dollar in the first half of 2026. The post never names the competitor, but the timing points straight at Open USD, a network Coinbase helped launch in June alongside Stripe and BlackRock.
The math behind the margin
Circle's post lays out where the money actually goes, down to the stock compensation line.
- Circle brought in about $1.4 billion in revenue in H1 2026, per its own blog post.
- $819 million of that went to distribution and transaction costs, the post says.
- The remaining $473 million covered compliance, liquidity and product development.
- About $214 million of that remainder was stock-based compensation and related costs.
- Net profit worked out to roughly 7 cents per revenue dollar, Circle says.
Coinbase's position
Coinbase is Circle's largest USDC partner. It's also a named backer of Open USD.
Open USD promises businesses minting and redemption without fees, passing reserve income to participants after only a management fee. That's a direct pitch against Circle's distribution-cost line, which ate $819 million of the $1.4 billion.
What the numbers actually argue
The default read is a pricing fight: Circle charges more, a rival charges less, partners will switch. Circle's own breakdown argues something narrower.
Distribution and transaction costs, the $819 million line, already flow to partners like Coinbase. The real dispute isn't whether partners get paid. It's whether Circle's remaining 34% of revenue, the $473 million for compliance, liquidity and product work, counts as fair overhead or as margin ready to be undercut.
Circle is framing stock-based compensation, about $214 million, as sunk cost tied to building the rails. Open USD's pitch implicitly treats that same bucket as fat a leaner model doesn't need.
Neither side has disclosed what Open USD's "management fee" will actually cost participants. Until that number exists, this is Circle publishing math to pre-empt a comparison nobody can run yet.
That's a defensive move dressed as transparency. Circle chose to disclose its internal cost structure before a single Open USD transaction fee hits a filing anywhere.
Open USD's fee disclosure
The entire dispute collapses into one unanswered question: what does Open USD's management fee actually cost a business versus Circle's embedded distribution cost?
- Open USD publishing a concrete management-fee schedule or rate card.
- Coinbase disclosing what share of USDC distribution revenue it currently earns from Circle.
- Any large USDC distribution partner publicly shifting volume to Open USD within two quarters.