The high interest policy of USDC is aimed at Chinese retail investors. Domestic loan interest rates are between 3% and 4%, while USDC offers an annualized rate of 12%, creating an 8-point interest spread that is enough for significant funds to bypass regulations and directly purchase USDC for arbitrage.

In this way, retail investors earn interest, Circle subsidizes the interest but gains market share, and the Trump administration sells a large amount of U.S. Treasury bonds.

The crypto market also benefits, as many users enter the market, and a portion of the arbitrage funds will turn into buying pressure. Where the water flows, it will always be wet.