5 Key Takeaways from Circle's IPO Filings

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Introduction

Welcome to the Tokenized newsletter, brought to you by the creators of the Tokenized Podcast; Simon Taylor of Fintech Brainfood and Pet Berisha of Sporting Crypto, written by Jeremy Batchelder.

We are the newsletter for institutions that need help preparing for a Tokenized future.

If you’re wondering why we’re posting twice in two days, it’s because Circle’s prospective IPO marks a watershed moment for the industry, and their filings are incredibly interesting.

We’re bringing you 5 Key takeaways, and some questions that will help you digest and parse the $4bn stablecoin giant going public.

Circle Internet Financial, the issuer of the USD Coin (USDC) stablecoin, has officially filed for an Initial Public Offering (IPO) with the U.S. Securities and Exchange Commission (SEC). 

The company plans to list its Class A common stock on the New York Stock Exchange under the ticker symbol "CRCL”.

Headline figures:

• Net income of $156 million on revenue of $1.68 billion compared to a net income of $268 million on revenue of $1.45 billion in 2023. 

• Most of this revenue is attributed to reserve income generated from interest on assets backing USDC.

• Operating expenses totalled $491.7 million in 2024, with significant allocations to compensation ($263.4 million), general and administrative costs ($137.3 million), and IT infrastructure ($27.1 million). 

What is USDC?

USDC is the second-largest stablecoin in circulation (with Tether first). USDC supply has increased from under $40bn from April 2024 to nearly $60bn in 2025, a ~50% increase.

If we look at the same period for Stablecoins, the total market cap has grown from $140bn to $230bn, marking a $90bn / 64% increase.  USDC supply is growing slower than the market.

The S1 filings are fascinating, with so much to unpack.

We at Tokenized have got you covered. Here are 5 key takeaways.

Key Takeaways: 

(1) Coinbase wins big in its partnership with Circle. 

Circle earned ~$1.7b revenue in 2024 and paid out $900M+ to Coinbase as a distribution partner which likely comes with very little Opex.

• B2BC distribution is Circle’s primary go-to-market, and attempt to land-grab market share.

• It has replicated this "pay for distribution" partnership with Binance, likely in an attempt to grab market share as a moat from competitors as the market grows.

• Circle also partners with companies like Nubank and Mercardo Libre as the stablecoin of choice.

It’s worth noting that Coinbase uses the revenue here to offer USDC yield to their customers, likely using it as a low CAC method to upsell customers to different products.

Key question to be answered: Can they maintain market position with incumbents like Fidelity launching stablecoins? Incumbents have in-built distribution that doesn’t cost them close to $1bn PA…

(2) Decreasing Treasury rates will impact revenues

Market share isn't growing: Hovering between 20% and 30%, although Circle have almost kept up with total Stablecoin market growth year-on-year; ~50% compared to ~64% respectively.  

Falling rates would mean falling treasury yields which would mean falling revenue for Circle. In the S-1, Circle estimated that just a 1% decrease in interest rates could result in a $441 million decrease in its stablecoin reserve income.

Key Questions to be answered:

How does Circle grow if Treasury rates come down? 

(1) Offer yield? Offshore and DeFi Competitors offer yield bearing stablecoins but being on shore Circle would need new legislation to get into “yield-bearing” stablecoins. That would eat into margins.

(2) TradFi Partnerships: If there is a gold rush for stablecoins, could Circle be the big enabler of that?

(3) Diversifying what they invest in? Tether is buying cashflow assets in agriculture and commodities. Circle likely doesn’t generate enough free cash flow for that route to be an option.

(3) Growth Has been Driven By Distribution Partnerships - Will this last?

They added Binance, Nubank, Mercardo Libre, and Grab this year. It’s unclear how the economics work, but they’re likely sharing some of that. We suspect this is a “land grab” of the TradFi assets. 

But are these sticky partners?

Key Questions to be answered:

• What happens if their pipeline of partners start issuing stablecoins?
  
  If Nubank were to start over on stablecoins, would they issue their own…? We’ve seen that Robinhood is a major member of the USDG consortium, for example.
  

• Can they win by distribution when incumbents don’t need to pay for distribution?
  
  As already discussed, the near-$1bn Circle paid Coinbase would not be a cost to issuers who have their own distribution mechanisms.
  

• What are the products that Circle can launch when they don’t own B2C that can drive significant revenues?

(4) Regulatory clarity helps Circle some; competitors more?

Circle has been at the forefront of pushing for regulatory clarity. They've successfully influenced everything from Europe's MiCA regulation to both proposed US laws (GENIUS and STABLE). They've arguably "won" the narrative on "stablecoins as a way to extend dollar dominance in the 21st century."

Circle is at the front of the line to capitalize on regulatory clarity, but the competitors are too. Coming from two primary dimensions.

• Competitors from TradFi: Fidelity just launched a stablecoin, PayPal’s PYUSD is growing, USDG has major brands involved, and multiple banks are planning their market entry.

• Competitors from DeFi: USDe is the fastest-growing stablecoin in history

Key Question to be answered: Now that their regulatory arbitrage (being the most regulated player) is diminishing, can they win on distribution alone, and will that grow fast enough?

(5)  Circle's story is fascinating

 It's a three-time phoenix:

• 2013: Launched as Bitcoin wallet ➡️ Failed to beat Coinbase

• 2017: Pivoted to OTC trading desk ➡️ Ultimately not defining for them

• 2018: Final pivot to USDC stablecoin ➡️ Now backing $60B in digital dollars and the second largest stablecoin. Also, the largest "onshore" stablecoin (which could be very important).

It's also survived countless industry crashes and failed exit attempts.

• Walked away from a doomed SPAC in 2022 while still unprofitable

• Survived the SVB crisis and collapse of Silvergate/Signature that nearly broke USDC

• Built a stablecoin empire challenging Tether's dominance.

And their founder's story is also fascinating.

Jeremy Allaire was the CTO at Macromedia and the originator of the "Flash Player," which was how we watched videos on the internet before YouTube and Vimeo.

It's not an overstatement to say Jeremy saw YouTube and Netflix content-like services before anyone else.

He then founded Brightcove, a video platform which he successfully led to IPO in 2021

Circle marks the third time Jeremy has made it to IPO.

Key questions:

• Is Jeremy early to the market and early to exit again?
  

• Is it smart to IPO whilst rates are high or is this a hail mary for liquidity before larger players crash the party?
  
  

  

  H/T @theoneandomsy on X

As per this image, the two-year numbers look a lot less impressive than the 1-year numbers.

With rates the highest they’ve been in Circle’s existence, some are seeing this as a prime opportunity for them to IPO. 

To conclude…

It will be fascinating to see how Circle’s public stock holds up in the market, and how quickly they can diversify revenues, especially if rates are lowered.

It’s IPO season, so buckle up. And crypto is coming to public markets in a variety of ways.

Thanks so much for reading the Tokenized Newsletter!

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