Stablecoins for investors: what’s all the fuzz about?

Introduction: why stablecoins are suddenly everywhere

From political hearings in Washington to realignment in the payment sector, stablecoins have moved from crypto curiosity to macroeconomic talking point. The U.S. Senate recently passed the GENIUS Act, granting regulatory clarity to dollar-backed stablecoins. Meanwhile, Circle, issuer of USDC, has recently gone public and is already seeing one of the most remarkable post-IPO rallies of the year.

At the same time, financial giants like Visa and Mastercard have seen their stock prices hit by fears that stablecoins could bypass their networks. And with more than $3.7 trillion in potential demand for tokenized Treasuries and stablecoin reserves parked in short-term U.S. debt, it’s clear this isn't just about crypto anymore. It's about the structure of global money.

What are stablecoins – and why they matter

Stablecoins are digital tokens designed to hold a fixed value, typically pegged to fiat currencies like the US dollar. Unlike volatile cryptocurrencies such as Bitcoin, stablecoins aim for price stability. They come in several forms, including fiat-backed coins like USDC and USDT, crypto-collateralized ones like DAI, and algorithmic varieties that try to maintain their peg through code — though these have largely proven unreliable.

What makes stablecoins important today is their growing role across the financial ecosystem. They allow instant global payments, enable dollar access in emerging markets, and serve as collateral in decentralized finance (DeFi). In many ways, they now act as liquidity bridges between traditional finance and blockchain-based applications.

To give one concrete example: in Argentina, where inflation has surged and access to U.S. dollars is restricted, people increasingly turn to stablecoins like USDC or USDT to preserve value and transact online. Instead of using unstable local currency or paying hefty exchange fees, they can receive payments in stablecoins, convert only what they need locally, and retain the rest in a dollar-pegged digital format — instantly and often at lower cost.

Circle and the business of USDC

Circle (Ticker CRCL) is the issuer of USDC, the second-largest stablecoin by market cap after Tether (USDT). What sets Circle apart is transparency — its reserves are publicly disclosed and primarily invested in short-term U.S. Treasuries. That means Circle earns yield from those Treasuries, and its revenues rise when interest rates go up.

As of June 19, 2025, Circle has $61.2 billion worth of USDC in circulation. To give a concrete example: for every $10 billion held in USDC reserves, mostly invested in short-term U.S. Treasuries, a 5% annual yield would generate roughly $500 million in interest income. Circle shares 50% of its revenue from USDC with Coinbase, as disclosed in official filings. While the remaining portion may be held in reserve or reinvested, the core business model revolves around capturing yield from safe, liquid government debt.

With $1.45 billion in revenue reported for 2023 and $1.68 billion in 2024 and one of the strongest post-IPO rallies seen this year—its share price rising from around $68 to over $270 in just two weeks—Circle is drawing attention from investors. The company also has a revenue-sharing agreement with Coinbase, in which 50% of USDC-related revenue is shared with them as disclosed in official filings and is integrated with major players like Visa.

In effect, Circle operates like a modern-day money market fund manager — only fully digital and blockchain-native.

How investors can profit from the stablecoin boom

One way to ride the stablecoin wave is through publicly listed companies that directly benefit from this growth. Coinbase, for instance, shares in Circle's revenues and plays a central role in issuing and managing USDC. PayPal is building its own stablecoin infrastructure, and even Visa and Mastercard, while initially under pressure, are now exploring how to incorporate stablecoin-based settlement into their own systems.

While some investors may be tempted to look at ETFs tracking short-term Treasuries or blockchain innovation, not all such products are widely available. For most investors, the clearest exposure lies in identifying listed companies with strong ties to stablecoin growth. As these rails expand, these businesses could stand to benefit from transaction volumes, custody services, and integration revenues.

The strong investor interest following Circle’s IPO and the growing revenue it generates from stablecoin activity serves as a signal: digital dollars are no longer theoretical. They’re in use, regulated, and increasingly profitable.

Risks to consider

Despite the opportunity, there are risks. Regulatory momentum could shift, especially if future political leadership changes course. Stablecoins still rely on their ability to maintain a 1:1 peg to the dollar — something that, if lost, could erode investor confidence. Falling interest rates could reduce revenue from reserves. And if central banks roll out their own digital currencies, stablecoins may face strong competition.

Stablecoins are no longer just about crypto — they represent a potential shift in how digital money flows through the global financial system. As regulation clarifies and infrastructure matures, stablecoins may increasingly become part of every investor’s broader market outlook.