Circle increased its minting fees for a second time this year.
Stablecoin issuer Circle has increased USD Coin (USDC) minting fees for the second time this year, capitalizing on increasing stablecoin demand. Bloomberg broke the news of this second fee hike by the US-based stablecoin company.
The firm will now levy a transaction fee beginning at 0.03% for high-volume redemptions that surpass $15 million, with that percentage going up to 0.1% as the amount of USDC increases. Circle has been collecting fees for those minting its tokens in volumes going above $2 million since September. Even earlier, the firm introduced a fee for swaps on its Circle Mint platform for users swapping over $15 million.
Of course, with fees being charged only for such high volumes, institutional investors and a small number of retail investors who interact with the large amounts are most likely to be affected by the hike. Those redeeming smaller amounts of USDC will continue doing it without paying Circle.
Circle Is Making Big Moves
The firm’s decision to introduce minting fees could let it rake in massive profits as institutional in crypto is on the rise, with instruments like Bitcoin and Ethereum ETFs making waves. Furthermore, Circle is becoming a dominant force in the crypto industry. It looks to grow bigger than ever with a looming initial public offering (IPO) that will take it public and to Wall Street—literally and figuratively. The stablecoin issuer has announced that it will move its headquarters to Wall Street soon. It filed for an IPO with the US Securities and Exchange Commission (SEC) in January.
The IPO would take Circle’s status to new heights, positioning it as the on-chain dollar counterpart with the SEC’s blessings intact. Circle is already positioning itself to be this in international markets. It is collaborating with Latin American countries like Mexico and Brazil to integrate USDC into their national payment systems. This integration will make cross-border dollar-based transactions smoother, quicker, and cheaper than TradFi methods.
However, it looks like Circle’s market share has declined over the past two years. Its $34 billion stablecoin market cap gives it a 20% market share in the stablecoin space, while Tether boasts a 70% market share with a $120 billion market cap. Nevertheless, Circle’s moves set it up for success. For instance, it became the first registered stablecoin issuer under the European Union’s Markets in Crypto Assets (MiCA) framework. That puts it ahead of Tether in the bloc—the largest stablecoin issuer is yet to register there.
