Stablecoins Go Mainstream: What They Do and How They Work

Stablecoins have gained mainstream attention after Circle's IPO, with its USD Coin (USDC-USD) becoming the world's second-largest stablecoin, valued at $61 billion. Stablecoins are digital currencies pegged to another asset, such as the US dollar, and are designed to maintain a stable value. There are two types: collateralized and algorithmic. Stablecoins are popular for online transactions and are expected to become a major part of the internet's money rail in the future.

Title: The Rise of Stablecoins: Circle's USDC and the Changing Landscape

Stablecoins have gained significant mainstream attention following Circle's Initial Public Offering (IPO), with its USD Coin (USDC-USD) becoming the world's second-largest stablecoin, valued at $61 billion. Stablecoins are digital currencies pegged to another asset, such as the US dollar, designed to maintain a stable value. They are popular for online transactions and are expected to become a major part of the internet's money rail in the future.

Circle, a U.S.-listed stablecoin issuer, has quietly set up a revenue-sharing agreement with Bybit, the world’s second-largest cryptocurrency exchange, according to two people with knowledge of the arrangement [1]. This move follows Circle's long-standing revenue-sharing arrangement with Coinbase, which has helped proliferate USDC across the industry.

Circle's pre-IPO filing revealed details about a revenue-sharing arrangement with Binance. Circle shares 50% of the yield from the reserves backing its USDC stablecoin with crypto exchanges like Coinbase and Binance. In its latest deal, Circle has extended this model to Bybit, fostering adoption of USDC by rewarding these platforms with a portion of the interest on Circle's reserves [1].

The stablecoin sector is heating up, with Circle's USDC currently standing at close to $62 billion in circulation, while Tether’s USDT has the largest supply by some margin at about $160 billion [1]. Competition in the stablecoin space is intense, with new projects like the Robinhood-backed USDC seeking to drive adoption through revenue-sharing arrangements among participants.

The stablecoin market is expected to grow significantly in the coming years. Ripple CEO Brad Garlinghouse predicts the market will grow from $250 billion to $2 trillion, fueled by regulation and rising institutional demand [3]. This projection is echoed by U.S. Treasury Secretary Scott Bessent, who recently said that dollar-linked stablecoins could hit $2 trillion and play a key role in strengthening the U.S. dollar’s global dominance.

The recent passage of the GENIUS Act has provided a clear framework for issuing and regulating stablecoins in the U.S., which is expected to supercharge adoption. Traditional banks are also embracing stablecoins, with BNY Mellon becoming the primary custodian for Ripple's RLUSD stablecoin, further legitimizing the sector [3].

In conclusion, stablecoins are poised to become a major part of the internet's money rail, driven by increasing adoption, regulation, and institutional support. Circle's USDC, with its strategic revenue-sharing agreements, is at the forefront of this transformation.

References:
[1] https://www.coindesk.com/business/2025/07/09/circle-has-usdc-revenue-sharing-deal-with-second-largest-crypto-exchange-bybit-sources
[3] https://coinpedia.org/news/ripple-ceo-brad-garlinghouse-says-stablecoin-market-will-hit-2-trillion/