Core Viewpoint - The recent surge in Circle's stock price and the competitive landscape of stablecoins highlight the growing importance of compliant stablecoins like USDC in the financial ecosystem, especially as regulatory frameworks evolve in the U.S. [1][4][9] Group 1: Circle's Market Performance - Circle's stock debuted at $31 on June 5 and surged to over $275 by June 23, marking an increase of nearly 800% in less than three weeks, making it a focal point in the U.S. stock market [1][4]. - The market's enthusiasm for Circle reflects the intensifying competition in the stablecoin sector, particularly between compliant USDC and non-compliant USDT [1][4]. Group 2: Regulatory Environment - The ongoing discussions around the U.S. "GENIUS Act" aim to establish a regulatory framework for stablecoins, which could significantly impact the competitive dynamics between compliant and non-compliant stablecoins [1][9]. - The lack of a unified federal regulatory framework in the U.S. contrasts with Europe, which has already implemented specific regulations for stablecoins [9][10]. Group 3: Circle and Coinbase Partnership - Circle and Coinbase initially established a joint venture, Center, to issue USDC, with both companies holding equal shares. However, operational control has shifted predominantly to Circle [10][13]. - The partnership agreement allows Coinbase to receive 50% of USDC's profits, with additional bonuses based on the volume of USDC held on Coinbase's platform [10][15]. Group 4: Market Dynamics and Future Outlook - The stablecoin market is projected to grow significantly, with U.S. and Canadian governments targeting a $2 trillion issuance by 2028, up from the current $250 billion [6][9]. - The competitive landscape is expected to evolve as traditional financial institutions, including major banks, explore issuing their own stablecoins, intensifying the competition [22][24]. Group 5: USDC's Growth Trajectory - USDC's circulation has grown from approximately $4 billion in 2018 to around $610 billion currently, driven by factors such as the DeFi boom and increased institutional adoption [26][30]. - Key events, such as the collapse of Silicon Valley Bank, have impacted USDC's market performance, leading to a significant reduction in its issuance [29][36]. Group 6: Profitability and Business Models - The profitability of stablecoin operations varies significantly, with USDC's high promotional costs impacting its net profit margins compared to USDT, which has leveraged non-compliant assets for higher returns [38][44]. - USDT's business model, which includes a mix of compliant and non-compliant assets, has allowed it to maintain a competitive edge in profitability despite regulatory scrutiny [39][44].