Polymarket Evaluating Stablecoin to Monetize $8B USDC Reserves, Reduce Circle Dependency

Polymarket, a crypto-based prediction market platform valued at over $1 billion, is evaluating the launch of its own stablecoin to capture yield from reserves currently managed by USDC issuer Circle. The platform reported processing approximately $8 billion in betting volume during the last U.S. election cycle, with significant USDC reserves locked in its markets generating returns for Circle rather than Polymarket itself. The company is weighing options such as a proprietary stablecoin or a revenue-sharing agreement with Circle to address this financial imbalance [1].

The initiative stems from Polymarket’s desire to retain control over its liquidity and reduce dependency on third-party stablecoin issuers. A source familiar with the matter noted that the platform does not require full fiat on-ramps or off-ramps but seeks a seamless swap between USDC and an internal stablecoin to enhance security and control. This approach would allow Polymarket to monetize its reserves directly, rather than ceding yield to external entities [1].

Recent U.S. regulatory developments have created a more favorable environment for stablecoin issuance, particularly for platforms operating in controlled ecosystems. Polymarket’s closed system, where stablecoins are used exclusively within its betting markets, reduces the complexities associated with broader adoption. This contrasts with the challenges faced by traditional finance firms, which must navigate wider regulatory scrutiny for public stablecoin offerings. Circle, meanwhile, has actively pursued revenue-sharing agreements with fintech companies and exchanges to maintain its market position amid competition from rivals like Tether [1].

Polymarket’s financial strategy aligns with its broader growth trajectory. The platform attracted 15.9 million visits in May alone, underscoring strong user engagement and transaction volumes. Simultaneously, the company is preparing to reenter the U.S. market through the acquisition of domestic exchange QCEX, following the resolution of regulatory issues related to U.S.-based user access. These moves highlight Polymarket’s intent to consolidate its market position while addressing liquidity management challenges [1].

The potential launch of a stablecoin represents a strategic shift in how prediction markets approach yield capture and liquidity control. By reducing reliance on external issuers, Polymarket aims to align its financial interests with its ecosystem. This trend could signal a broader industry shift toward self-sustaining stablecoin infrastructures, particularly in niche markets where controlled environments mitigate regulatory risks.

Source: [1] [title1] [url1]

[1] [title1] https://coinmarketcap.com/community/articles/688231cf2b418c119ea24aae/