Stablecoin issuers can earn income from the assets backing tokens, charge fees for direct issuance or redemption, and negotiate payments tied to distribution. For Circle, reserve income has been the dominant disclosed revenue source. That income is not automatically passed to token holders, and gross revenue is not the same as profit retained after partner payments and operating costs.
How reserve income works
A fiat-backed issuer holds reserve assets intended to support its tokens. In a simplified model, income depends on the average reserve balance and the return earned on those assets. Both sides matter: more tokens outstanding can mean a larger earning base, while asset mix and available rates affect income per dollar. This is a conceptual explanation, not an accounting formula.
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Circle says it earns interest and dividends on USDC reserve assets. Its 2025 SEC filing reports that reserve income rose by $975.7 million, or 58.7%, for the year ended December 31, 2025, compared with 2024. Circle attributed about $1.4 billion of the increase to a 93.9% rise in average daily USDC circulation, alongside strategic partnerships and integrations; those are the company’s reported drivers for that period, not a universal rule. Circle’s 2025 Form 10-K
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Circle’s SEC registration filing reports reserve income represented 95% to 99% of its total revenue in the specified 2022–2024 and first-quarter comparison periods. That is a Circle-specific historical range, not an industry-wide figure. Circle’s SEC registration filing
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Why reserve income is not the same as profit
Revenue from reserves is only one part of the issuer’s economics. Distribution arrangements can direct a portion of income to platforms and other participants, while the issuer also has operating and compliance costs. Circle’s filings describe a daily payment base derived from net reserve income after specified third-party management fees and expenses. Circle retains an issuer portion; allocations are also linked to USDC balances on Circle and Coinbase platforms, and Coinbase receives a share of remaining broader-ecosystem income after payments to approved participants. The headline reserve-income figure therefore should not be read as Circle’s retained income or net profit. Circle’s 2025 Form 10-K Coinbase’s SEC filing
Negotiated incentives can support distribution
Circle disclosed a one-time upfront fee of $60.3 million paid to Binance in its 2025 Form 10-K, as well as monthly incentive fees based on USDC balances held on Binance’s platform and in its treasury, subject to minimum balance requirements. This is an example of a negotiated distribution arrangement, not a standard rate that applies to every exchange or issuer. Circle’s 2025 Form 10-K
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Direct issuer fees are separate from trading and network costs
Issuers may charge customers who mint or redeem tokens directly with them. Tether’s fee page, accessed October 3, 2026, lists the following direct-access terms:
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| Direct Tether service | Published term |
|---|---|
| Minimum acquisition or redemption | USD 100,000 |
| Acquisition fee | 0.1% |
| Redemption fee | The greater of USD 1,000 or 0.1% |
| Verification fee | USD 150 in Tether Tokens; non-refundable, but may be part of a redemption |
These are Tether’s direct issuer fees, not a universal charge on ordinary token holders. Exchange trading fees and blockchain network gas are separate costs. Check Tether’s current fee schedule before relying on these terms, since issuer fees can change.
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Reserve composition affects both earnings and exposure
Circle’s disclosed USDC reserves
Circle says that since January 2023, USDC reserves have been limited to bank cash balances and the Circle Reserve Fund. Its current transparency page says most of the reserve is held in that SEC-registered government money market fund, managed by BlackRock. The page is the place to check current reserve composition; it can change over time. Circle’s SEC registration filing Circle’s reserve transparency page
Tether’s reserve disclosures
Tether says it typically provides daily circulation information and quarterly reserve information, with BDO Italia preparing its reserve reports. It also says its reserves include bitcoin and gold, which it holds as an inflation hedge, and cautions that bitcoin’s value in dollars can change significantly. Those statements describe Tether’s own approach and reporting cadence. A reserve report is not a full income statement for the issuer. Tether’s FAQ and reserve information
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Do stablecoin holders earn the issuer’s reserve income?
No—not merely by holding a token. Circle’s SEC-filed disclosure states: “USDC ownership does not convey to USDC Holders any interest, rewards, or other returns in respect of their holding of USDC.” Circle’s SEC-filed disclosure
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A third-party service may separately offer rewards or a lending return, but that is distinct from the issuer’s reserve-income model. The existence of issuer income alone does not establish that a holder receives any of it.
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What can—and cannot—be compared across issuers
A useful comparison needs like-for-like evidence rather than a single reserve snapshot. Check the earning base and reporting period, reserve assets, disclosed returns, distribution payments, direct issuer fees, and the basis of the disclosure. Audited financial statements, reserve attestations, and live transparency pages answer different questions; an attestation should not be treated as a full issuer income statement.
The sources cited here do not establish a directly comparable detailed breakdown of Tether’s USDT revenue, costs, and retained profit. Circle’s disclosed revenue mix and partner arrangements should not be projected onto Tether or treated as an industry template.
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