Stablecoins are gradually becoming a convergence point between the crypto market and the traditional financial world. With the passage of the US GENIUS Act, the regulatory framework is becoming clearer, and the stablecoin market is ushering in a new wave of growth opportunities. Recently, Circle CEO Jeremy Allaire was interviewed by Bloomberg (Odd Lots), where he explained the operational logic, profit model of USDC, and the long-term impact of stablecoins on global payments.
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Why do stablecoins attract global financial attention?
In the past, stablecoins were mainly used for fund flows within exchanges, but as regulations become clearer, the role of stablecoins is evolving:
Fast cross-border payments: Completing global fund transfers through blockchain, much faster than traditional banks.
Reducing transaction costs: Eliminating multiple intermediaries and high fees.
Gradually friendly policies: The US GENIUS Act provides legitimacy and clear regulations for stablecoins.
This means stablecoins are transitioning from being 'tools for crypto players' to 'financial infrastructure.'
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How does USDC make money?
Circle's business model is different from general crypto projects; it is closer to a financial institution:
1. Interest on reserve funds
USDC is backed by a 1:1 reserve of dollar assets, and Circle can obtain stable interest income by purchasing short-term government bonds or deposits with reserve funds.
2. Payment and settlement fees
Collaborating with businesses and financial institutions to handle payments and settlements, charging fees.
3. Expanding new applications
Supporting e-commerce, cross-border trade, and the Web3 ecosystem, allowing USDC to enter more everyday payment scenarios.
For investors, this 'banking' model represents that the risks of USDC are relatively controllable and have long-term profitability.
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Three major scenarios that stablecoins may change
Jeremy Allaire believes that stablecoins have the potential to open new payment and financial markets in the future:
Cross-border commercial payments: Businesses can settle trade directly using USDC, bypassing cumbersome traditional clearing processes.
On-chain financial services: Supporting highly active applications such as DeFi collateral, lending, and yield farming.
Web3 economy: Payments in gaming, music, and creator sectors can be directly made with stablecoins, forming a closed-loop economy.
This means stablecoins may become new infrastructure for global payments in the future, not just tools for exchanges.
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The story of stablecoins is shifting from 'fund rotation within exchanges' to 'global fund networks.' For investors, understanding the business model and policy environment of USDC may be key to positioning for the next wave of crypto payment trends.