Circle is the issuer of USDC, one of the top stablecoins by market cap, as well as a suite of tools and services supporting the use and adoption of USDC.
As cryptocurrencies have grown in popularity, stablecoins have become increasingly important in the ecosystem. As a means of on- and off-ramping from volatile crypto-assets, they help bring that stability and certainty of fiat currencies to the cryptocurrency markets while maintaining the benefits of being on-chain, such as security, decentralization, and transparency.
For several years, Tether dominated the market for stablecoins, leading to demand for more regulated, transparent alternatives. In 2018, payment firm Circle became the co-founder of a consortium that launched USDC, a USD-backed stablecoin that has developed to become the second-largest stablecoin by market cap.
USDC is now Circle’s flagship product, and Circle’s business is focused on the development and adoption of its stablecoins above all else.
History of Circle
Circle was founded in 2013 by Jeremy Allaire and Sean Neville as an online payment company aiming to facilitate the adoption of Bitcoin. It launched with $9 million in venture funding.
The first product was an app for trading Bitcoin and fiat currencies called CirclePay. From the outset, Circle differentiated itself from much of the crypto sector by prioritizing regulatory compliance at a time when most of the industry was unregulated. In 2015, the company became the first to receive a Bitlicense issued by the New York State Department of Financial Services, and in 2016, it became the first licensed virtual currency provider by the UK Financial Conduct Authority.
In 2018, Circle acquired Poloniex exchange, which it sold at a loss within 18 months as part of a broader restructuring exercise.
Also in 2018, Circle co-founded the Centre consortium together with Coinbase to launch the USDC stablecoin. Centre closed in 2023 and, since then, Circle has had full governance and control over USDC.
The company has established several high-profile partnerships with household-name firms. In December 2020, it announced a collaboration with Visa that would allow businesses to spend USDC at any merchant accepting Visa payments. In 2024, Circle announced a partnership with Sony to integrate USDC into Sony’s Soneium public blockchain platform.
In 2022, the company announced it was planning to go public in the US via a reverse merger with a special purpose acquisition company. The deal later fell through. However, in January 2024, the company filed a draft registration for an initial public offering with the US Securities and Exchange Commission. As of late 2024, the company was still privately owned, although Jeremy Allaire had publicly stated a commitment to pursuing a stock market listing.
As of 2024, Jeremy Allaire remains CEO and figurehead for Circle. The company is based in Boston, Massachusetts.
Circle products and services
Circle has operated several different types of crypto-related services over its history. However, over recent years, the company’s mission is focused on the development of stablecoins as digital money, which is reflected in its products and services.
USDC
USDC differentiates itself among stablecoins with a focus on regulation and transparency. Although the US hasn’t yet issued any concrete regulatory frameworks for crypto or stablecoins, the USD reserves backing USDC are invested in a dedicated fund registered with the SEC as a government money market fund. Circle engages Blackrock for daily independent reports on the state of USDC balances and reserves.
USDC is minted natively on 16 blockchains, including Ethereum, Avalanche, and Solana, although versions of USDC exist on other chains thanks to Circle’s support for cross-chain issuance (see below).
As of 2024, USDC is the second-largest stablecoin by market cap, accounting for over 20% of the total stablecoin market. It has also achieved the status of being the most traded stablecoin by trading volume.
EURC
In July 2024, the EU introduced the Markets in Crypto-Assets (MiCA) regulation, which regulated crypto-assets and service providers. Circle became the first stablecoin issuer to obtain an e-money license to issue USDC and a euro-backed stablecoin, EURC, to people in the EU.
EURC is issued using a similar reserve and transparency model to USDC. However, the market cap and usage of EURC are substantially lower than that of USDC, as well as the asset being issued on fewer blockchains.
Stablecoin minting
Businesses such as exchanges, institutional traders, or financial institutions can mint USDC via Circle Mint. For instance, a business with cash reserves could use it to mint stablecoins as a way of generating returns through mechanisms such as lending or arbitrage trading.
Cross-chain services
USDC is only natively available on 16 blockchains; however, unofficial, bridged iterations of USDC exist on many other platforms to make stablecoin liquidity available for users of smaller blockchains. However, this creates a challenge for Circle since these instances are unsupported, fragmenting liquidity and degrading the user and developer experience.
In 2024, Circle rolled out the Cross-chain Transfer Protocol (CTP), which enables native USDC to be transferred across supported blockchains using a mint-and-burn mechanism. In this way, each chain supports the same instance of USDC, not a wrapped version, preserving liquidity. Furthermore, users don’t need to use third-party bridges to send USDC across supported chains.
Programmable wallets
Circle develops programmable wallets to support the take-up of USDC payments among companies such as banks, fintech firms, marketplaces, and exchanges. Programmable wallets offer features such as developer-controlled key ownership models, subscription payments, and built-in compliance features.
Circle essentials
- Circle is the financial services company that issues the USDC stablecoin, the second-largest stablecoin by market capitalization.
- Circle differentiates USDC among stablecoins with a focus on regulation and transparency.
- Along with USDC, the company also issues a euro-backed stablecoin, and provides services such as cross-chain protocols and programmable wallets that support USDC adoption.