Stablecoin issuer Circle has a $1 billion cash reserve pegged as insurance against a declining market capitalization and fresh competition from the traditional finance and technology industries, said CEO Jeremy Allaire.
In an interview with Bloomberg, Allaire revealed the war chest and shared his views on the uptick in competition from organizations such as PayPal that are new to the stablecoin space:
“I expect you will see many many, not just internet payments firms, but also all kinds of financial services companies and others begin to get more involved in this. It’s great to have this new competition. I do think it’s going to drive more and more companies into the field.”
Related: PayPal launches PYUSD stablecoin for payment
Circle is best known for its USDC (USDC) stablecoin, a digital token similar in design to regular cryptocurrency but backed entirely by fiat — in this case, the United States dollar.
However, since at least 2021, the company’s primary form of revenue has come from interest on its cash holdings and through its treasuries services. For the first half of 2023, Circle had a reported revenue of $779 million, surpassing its total revenue of $772 for 2022.
Despite this, the company has seen its market share in the stablecoin space decline from $45 billion at the start of 2023 to $26 million in just seven…
