The Key to Stablecoin Battle Circle Raises USDC Redemption Fees Again Continues Progress Towards IPO Goal

What happened?
Stablecoin issuer Circle has once again raised the redemption fees for its stablecoin USDC, targeting high-value users.
In the increasingly competitive stablecoin market, Tether’s USDT stablecoin remains the leader with a market share of 70%.
Circle plans to relocate to Wall Street by 2025 and actively promote its initial public offering (IPO).
Circle adjusts USDC redemption fees, impacting high-value transactions
Stablecoin issuer Circle has announced once again that it will increase the redemption fees for its stablecoin USDC, marking the second price adjustment this year.
Previously, exchanging USDC through the Circle Mint platform was free and unlimited. However, since September of this year, Circle has started charging fees for transactions with daily redemptions exceeding $2 million. The purpose of adjusting the fee prices is to meet the high demand for market liquidity.
This new fee model from Circle mainly targets institutional investors and high-frequency traders, with fees ranging from 0.03% per transaction and up to 0.1% for transactions exceeding $15 million. However, users can still avoid fees if they are willing to wait for two days.
A spokesperson for Circle pointed out that this fast redemption service is somewhat similar to the fast transaction fees charged by banks and other financial institutions, reflecting the market’s demand for efficient liquidity.
However, some users believe that the continuously increasing fees may reduce the attractiveness of USDC in future transactions, especially as more and more new stablecoin issuers enter the market this year, intensifying the competition between stablecoins.
Tether maintains market share leadership while Circle’s market share declines
Competition in the stablecoin market is intensifying, especially with Tether’s USDT stablecoin maintaining its market leadership.
According to DefiLlama data, the current market value of USDT is as high as $120 billion, accounting for nearly 70% of the market, while USDC accounts for less than 20%, with a market value of approximately $34 billion. Although Tether also charges a 0.1% fee for large transactions, it currently only applies to transactions exceeding $100,000.
In addition to the difference in market share, Circle also faces challenges in terms of revenue and valuation. According to Bulletin data, Circle’s valuation in the secondary market is approximately $4.5 billion, significantly down from $7.7 billion in 2022, indicating a decreased market confidence in its competitiveness.
Circle has previously attempted to go public through a merger with a blank-check company (SPAC), but ultimately canceled the plan in 2022. Circle has also refiled its IPO application with the U.S. Securities and Exchange Commission (SEC) and plans to relocate its headquarters to Wall Street by 2025 to enhance market recognition.
In addition to the United States, Circle is actively expanding the international use cases for its stablecoin. In September of this year, Circle announced the integration of USDC with the local banking systems in Brazil and Mexico, enabling local businesses to use USDC for instant transactions.
However, despite Circle’s continuous expansion of its business footprint, its market share has significantly declined over the past two years. With traditional financial institutions entering the stablecoin field, such as asset management company BlackRock planning to launch the BUIDL token as collateral for derivative trading, and financial technology company Robinhood exploring stablecoin applications under the EU framework, Circle will face even greater challenges in the future.
References:
bloomberg, cointelegraph