IOSG’s latest research centers on a simple question: in an increasingly crowded stablecoin market, is Circle still undervalued. The report points to a major regulatory milestone first. On December 12, 2025, Circle received conditional approval from the US Office of the Comptroller of the Currency to establish a national trust bank, the First National Digital Currency Bank. If full approval follows, Circle would be able to offer fiduciary digital asset custody services to major global institutions. IOSG also notes that Circle went public in 2025, and with faster USDC circulation, its valuation has reached $23 billion.
The broader argument is not built on short-term price action. It rests on how regulation is reshaping stablecoin competition. IOSG says China, the US, and Europe are all moving against opaque, hard-to-audit stablecoins, though they are taking different routes. China’s central bank said at a special meeting on November 29 that stablecoins have weaknesses in customer identification and anti-money laundering controls and are often used for money laundering, fraud, and illegal cross-border fund transfers. In the US and Europe, regulators are leaning toward reserve, licensing, and audit frameworks instead. That leaves compliant issuers like Circle in a stronger position to enter mainstream finance.
USDC supply is growing, and offshore markets are no longer out of reach
Tether remains the profit leader, and USDT still dominates emerging markets across Asia, Latin America, and Africa. IOSG cites East Asia alone as holding more than 90% market share for USDT. Even so, Circle has made visible gains. Over the past year, USDC net supply increased by $32 billion, second only to USDT’s $50 billion. The report adds that USDC’s share in India and Argentina has climbed to 48% and 46.6%, helped by rapid growth in crypto card usage.
That card segment has expanded quickly. IOSG says monthly stablecoin card volume rose from roughly $100 million at the start of 2023 to more than $1.5 billion by the end of 2025, a compound annual growth rate of 106%. On an annualized basis, the market is now above $18 billion. In India, crypto-backed credit cards address gaps left by traditional bank lending. In Argentina, dollar-linked assets offer a way to preserve value in a high-inflation environment. Because these cards need access to Visa or Mastercard rails, compliant stablecoins such as USDC are better placed to capture volume.
Quarterly results were strong, but the revenue mix is still narrow
Circle’s third-quarter numbers came in ahead of expectations. IOSG says quarterly revenue reached $740 million, including $711 million in interest income alone, above the market estimate of $707 million. Revenue was up 66% year over year. Adjusted EBITDA margin reached 22.5%, while USDC circulation nearly doubled. Revenue less distribution and other costs, or RLDC, came to $292 million, also beating expectations.
Still, the weak point is obvious. Circle’s business remains heavily tied to reserve income, making it sensitive to interest-rate moves. It also shares economics with Coinbase. Citing Circle’s S-1 filing, IOSG says Coinbase receives 100% of reserve revenue on USDC held on Coinbase’s platform, while interest from USDC held elsewhere is split 50/50 between the two companies. Based on figures compiled by Beating, Coinbase’s related revenue in Q3 2025 reached $354.7 million, roughly half of Circle’s own interest income. In practical terms, Circle gives up about $1 for every $2 of interest it earns.
Other revenue is growing, but it is still small. The report says Circle generated $28.5 million in other revenue during the quarter. Sequential growth accelerated to 20% from 15% in the prior quarter, yet this bucket still accounts for less than 4% of total revenue. Circle is trying to move from a spread-based model toward a service-based one, but the transition is not finished.
Onchain activity, CCTP, and Visa are treated as strategic pipes
One reason IOSG sees mispricing is that the market may be overlooking the expansion of the USDC network itself. The report says total stablecoin supply grew 59% year over year, and onchain transaction volume reached 2.3 times the level from a year earlier. USDC’s market share has risen to 29%. Its own onchain volume climbed to $9.6 trillion, or 6.8 times the prior-year period. A major driver is Circle’s Cross-Chain Transfer Protocol, or CCTP, which uses burn-and-mint transfers to reduce the complexity and risk commonly associated with traditional bridges.
Institutional distribution is also widening. On December 16, Visa announced that it had opened USDC settlement services on its US network, with Cross River Bank and Lead Bank named as the first participants, using the Solana blockchain. IOSG argues that the near-term revenue impact on Circle is limited because these settlement balances move quickly and do not sit long enough to contribute much reserve income. A separate estimate cited from blogger Didier puts the working inventory balance at only about 0.09% of current USDC supply. Even so, the partnership matters because it creates another settlement route into traditional financial institutions.
Visa’s stablecoin settlement pilot had already reached $3.5 billion annualized in monthly transaction volume as of November 30, up around 460% year over year, according to the report. For Circle, that looks less like an immediate earnings boost and more like a distribution upgrade.
Circle’s 2026 playbook shifts from issuance to ecosystem monetization
IOSG groups Circle’s next growth drivers into several layers. In the nearer term, transaction services and tokenized real-world asset products look more tangible. The report says total transaction volume across the USDC network reached $4.6 trillion this year. Through Circle Mint, the company charges exchanges and institutions 0.1% to 0.3% for large-scale minting and redemption, producing $3.2 million in Q3 2025 revenue. CCTP supports transfers across 23 blockchains and charges 0.05% on cross-chain volume, contributing $2.8 million in the same quarter.
On the RWA side, Circle acquired Hashnote and launched the tokenized Treasury fund USYC, which carries a 0.25% annual management fee and has reached $1.54 billion in assets under management. Deribit has integrated USYC as collateral for futures and options under portfolio margin.
Over a longer horizon, Circle is building ARC and the Circle Payments Network. IOSG says the ARC public testnet is live, with more than 100 enterprises participating, and management expects the mainnet to launch in 2026. CPN is being positioned as a B2B payments network for institutions and has already accumulated about 500 potential clients. IOSG’s conclusion is direct: Circle’s long-term value comes from turning USDC into a wider payments, settlement, and liquidity infrastructure stack. Near-term volatility remains part of the story, but if the compliance path keeps opening up, that value will not be measured by reserve interest alone.