A Very Deep Dive on Stablecoins, USDC, and a Platform for a New Financial System
So you're telling me Circle is already a $1B+ revenue ($50B+ of USDC*.02% interest rates on 3 month T-Bills) business with super high margins? That is incredible. Stablecoins are a real product that have created a real business with real cash flow.
I've had this day Circled on my calendar for a long time...
Really good article. One note I'd make is that Circle/USDC is making a new form of money but *without* the advantages of seignorage, which means they add value on top of the ecosystem with the fees associated with it to create their revenue streams (akin to taxation). In contrast is fiat money where when US creates another dollar, the dollar isn't backed by anything immediately tangible (like equivalent gold), but rather by the full faith and credit of the country. The latter means that they can actually expand money supply (though not too much) and thus expand the economy, whereas with USDC they have to add services on top to make revenues.
This is one of the circles of wanting to create currencies - because to create a currency is also to create an underlying economy. An essay version here - https://www.strangeloopcanon.com/p/how-to-make-money-by-making-money
About time someone did the Circle deep dive!
Loved this article, great work.
I feel like if this weren't sponsored, you might have actually linked the Taibbi article, no?
Thoughts on Circle's burn rate? I see the path to profitability you're pointing towards, but what happens if they can't get there?
they also charge for redemptions
Just gotta work on that damn Oracle problem..
Thoughts RE: CTO Larsson's findings about USDC not being bankruptcy remote?