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USDC Issuer Circle Braces for $618M Revenue Pressure Amid Fed Rate Cut Speculation
USDC Issuer Circle Braces for $618M Revenue Pressure Amid Fed Rate Cut Speculation
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USDC News -
Circle's stock dropped 9% on Thursday following Dragonfly investor Omar Kanji's warning of a potential $618 million revenue loss if the Federal Reserve implements 100 basis points in rate cuts. The stablecoin company's earnings from US Treasury holdings that back USDC WOULD face substantial pressure in a lower interest rate environment.
Despite reporting strong Q2 results with 53% year-over-year growth ($658 million in revenue and reserve income), Circle's Treasury-heavy reserves make it particularly sensitive to monetary policy changes. Kanji projects Circle would need to mint $28 billion in new USDC – representing a 44% supply increase – to compensate for the anticipated revenue shortfall.
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