Hi stable subscribers, 

Welcome to another edition of The Weekly Stable, the #1 source for stablecoin insights brought to you by This Week in Fintech.

Each week, over 75,000 fintech professionals rely on us for clear analysis, thoughtful perspectives, and steady coverage of the stablecoin space—going beyond the news.

It was once again a huge week for stablecoins, capped off by Circle's IPO filing which we'll be diving into today. 

Enjoy this week’s news below and let us know about any other feedback/suggestions you have.

(Find us online at @chuk_xyz, linkedin/chuk-okpalugo, @thestablecon and linkedin/stablecon)

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🏆 Top Stories

Circle Files S-1: But What Are They Worth?

Circle has officially filed its S-1. Headline numbers are $156M in net income on $1.68B of revenue.

There’s already great analysis out there on the Circle S-1 (see here, here, here, here, here and here). The key takeaway: most of the yield accrues to distributors like Coinbase and, as with many industries, value in stablecoins lies in distribution.

Rather than rehash the S-1 details, I want to focus on how to think about Circle’s valuation.

Most of the current discourse is centered around today’s metrics, revenue, margins, cost base, and the dominance of distribution. While these numbers help ground us in reality, valuation is about the future. Investors care about how these figures evolve and the probability-weighted range of outcomes.

Valuation 101

Early in my career, I spent my time evaluating companies when working in investment banking and private equity. There are many valuation methodologies, but they all boil down to the same thing: the present value of future cash flows.

Those future cash flows are driven by:

• Growth of earnings – How much larger will the earnings stream become?
• Quality of earnings – Are they repeatable, diversified, and cash-generative? Think: cash conversion, customer concentration, stickiness, recognition policies, cyclicality, competitive moat.

Once future earnings are estimated, they’re discounted using a rate that reflects the company’s cost of capital and investor risk appetite.

We won’t go deep into valuation mechanics here, but let’s walk through the key inputs to Circle’s valuation.

Growth Potential

The U.S. M2 money supply is ~$20T. The stablecoin market is only ~$230B. There's ample room to grow. The real question is: how much of that will USDC capture? And how much of the long term yield will they keep?

For 2024, Circle keeps 40% of the 5% yield they earn on USDC balances (average market cap of $33.3B) resulting in $659M gross profit. That’s roughly 200 bps on USDC market cap. In the long run, assume interest rates drop to 2% and Circle only retains 30 bps post-distribution in a more competitive market. At $500B in market cap, that’s still $1.5B in gross profit. At $1T, gross profit is $3B. Financial services are all about scale.

Net income (profit) potential scales depending on cost structure and operational leverage. At $1.5 - 3B of gross profit, a $1B+ net income business vs today’s $156M becomes plausible and potentially very attractive.

The stablecoin TAM is massive, and various scenarios can model different shares Circle might capture. Regulatory clarity helps Circle, but it also enables new entrants. Distribution remains critical for all competitors but Circle may have an edge with its partnerships plus early mover advantage. These distribution deals are expensive but necessary. They determine how defensible and scalable Circle’s earnings will be.

Quality of Earnings

Revenue concentration & rate sensitivity: 99% of revenue is interest income, which is highly sensitive to macro interest rate moves. With two rate cuts expected in 2025 and economic headwinds (e.g. tariffs, black swan risks), a downward trend in rates is more probable than not. No meaningful diversification in revenue = higher risk = lower quality earnings.

Cost structure: $263M in compensation but how does this scale? There is likely near-term growth needed to support compliance, BD, partnerships, regulatory affairs, blockchain development and so on, especially to grab and maintain share. However, it doesn’t necessarily grow with revenue or market cap. If distribution works as intended, revenue can scale much faster than costs. Over time, operating leverage will be critical for earnings growth.

Putting It All Together

At the end of the day, valuation is a supply-demand equilibrium between capital and opportunity. Circle is the only pure-play stablecoin company in public markets (or soon will be). That uniqueness may drive thematic capital interest but at the end of the day everyone will have to make their own determination.

Standard triangulation approaches apply—DCF, public comps, precedent transactions—but Circle doesn’t have great public comps/transactions. One way to reason through this is with a financial model:

• Define plausible ranges for key variables
• Test sensitivities
• Assign probabilities
• Arrive at a probability-weighted valuation

Sophisticated analysis will soon come from investment research departments of the investment banks covering the stock. However in the meantime I’ve built a simple model (nothing fancy—my ex IB colleagues would be embarrassed) to help you play with the assumptions and see how outcomes shift.

Base Case (2030):

• Global stablecoin market: $3T
• USDC share: drops from 25% to 20% → $556B
• Take rate: 40 bps → $2.4B in gross profit
• Operating costs: grow at 15% annually
• Net income: $1.2B
• 2030 valuation at 10–20x P/E = $12B - $25B

Discount that back to today using your preferred rate, but if you believe those assumptions, $5B valuation at IPO might be very attractive. 

2030 Bear Case:

• USDC market cap stagnates
• Take rate compresses to 20bps
• OpEx grows, operating leverage doesn’t materialize
• Net income collapses → valuation in low single-digit billions

2030 Bull Case:

• USDC hits $1T in market cap (!)
• Take rate expands to 60 bps
• Operating leverage plays out
• Earnings explode → high double-digit billion valuation

Of course, the devil's in the details and the details are in the assumptions.

Changes in each have varying degrees of effects on the model. Many more hours would be needed to build out sufficient detail to capture how the business will evolve.  If you model nothing else, focus on these three:

1. Stablecoin market cap × USDC market share
2. Take rate (yield retained after distributor payouts)
3. Cost structure and leverage

Final Thoughts

Valuation is never about getting to a single number. It’s about understanding the range of outcomes and building conviction about the probability distribution. For potential Circle investors, I think the most important questions are:

• How big is the stablecoin market in the long run?
• What market share can USDC sustainably command?
• How defensible is that share?
• What’s the long-term take rate after accounting for distribution?
• Can Circle maintain operating leverage?
• What optionality exists for future revenue lines? (not modeled here)

Check out the model. Plug in your assumptions. See how your outlook translates into value.

Do you like the stock?

(Reminder: this is not financial advice)

📺 Stableminded Podcast 

“Stablecoins are the quantum form of the dollar.”

That’s how Berhan Kongel describes the future of cross-border payments. As CEO of Keyrails, Berhan is connecting the fragmented financial systems of emerging markets to the global economy—without relying on traditional SWIFT rails.

What makes Keyrails different:

• Stablecoin-initiated SWIFT payments with overnight settlement
• Direct access to banking infrastructure—without touching USD custody
• Focused on originating payments from markets like Nigeria, not just receiving them
• A product-market fit built around real FX constraints and fragmented rails

This episode is a masterclass on how global money actually moves—and what’s broken about it.

🎙️ Season 3, Episode 4 of Stableminded is live now.

Special thanks to dfns for sponsoring this season.

Stableminded: S3.4 | Keyrails ft Berhan Kongel

In this episode of Stableminded, This Week in Fintech’s stablecoin-focused series, Drew Rogers sits down with Berhan Kongel, co-founder and CEO of Keyrails, a stablecoin-first payment infrastructure company bridging fragmented financial systems in emerging markets with the high-speed rails of the global economy. Berhan brings over 15 years of

This Week in FintechZach Fowler

🚀 Product Launches

Circle launches USDCKit, a developer-friendly SDK for PSPs to integrate and automate USDC payments at scale (read more)

CFX Launches MoveUSD: Enhancing U.S. Dollar Competitiveness with the First Instant-Transfer, Bank-Integrated Global Settlement Network (read more)

Mesh Launches Crypto Payments App on Shopify with PawCo Foods as First Merchant Partner (read more)

Upshift launches institutional yield platform (read more)

⚡ Stablecoin Adoption 

Sling integrates Circle’s EURC into it’s P2P wallet for European customers (read more)

Crypto Card Firm Baanx Partners With Circle for Rewards Wallet (read more)

Intercontinental Exchange (ICE), the parent company of the New York Stock Exchange, and Circle Sign MOU to Explore Product Innovation Based on Circle’s USDC and USYC Digital Assets (read more and here)

Agora partners with Polygon to make AUSD the stablecoin for the AggLayer ecosystem (read more)

Agora’s AUSD gets listed on Thailand’s largest regulated exchange Bitkub (read more)

Tokenized equities will dwarf stablecoins, says Kraken co-CEO (read more)

JPMorgan sees yield-bearing stablecoins growing from 6% to 50% of market share (read more)

Sony Electronics partners with Crypto.com to welcome direct crypto payment in Singapore (read more)

Tron's Justin Sun Bailed Out TUSD as Stablecoin's $456M Reserves Were Stuck in Limbo, Filings Show (read more)

FDUSD a $2B stablecoin experienced a significant depeg with claims by Justin Sun that it is insolvent (see more)

Mastercard, PayPal, Payoneer mull stablecoins for B2B payments (read more and here)

Hong Kong to debut world’s first tokenized money-market funds on blockchain (read more)

USDC becomes the default currency for new Binance Pay users (read more)

Ripple and Chipper Cash Join Forces to Unlock Faster and More Cost-Effective Crypto-Enabled Payments Across Africa (read more)

⚖️ Regulatory Developments

US House Committee passes stablecoin-regulating STABLE Act with a Bipartisan vote of 32-17. It will now head to a full house vote (see more)

The Trump family is cashing in on crypto. It’s creating problems in Congress (read more)

Fipto are now a Licensed Payment Institution in France (read more)

Japan to give crypto assets legal status as financial products, Nikkei says (read more)

FDIC says banks can engage in crypto activities without prior approval (read more and here)

Binance ends Tether USDT trading in Europe to comply with MiCA rules (read more)

Rumors that Congress will try to pair a stablecoin bill with market structure legislation may have some truth to them - the House has scheduled a market structure hearing for next week (read more)

Top Lawmaker Shuts Down Coinbase Plea for Interest-Bearing Stablecoins (read more)

💬 Posts of the Week

📖 Reads of the Week

Brian Armstrong writes on the benefits of onchain interest

Shawn Lim draws good parallels between stablecoins and money market funds

Happy’s article is a great piece for “why stablecoins” for those new to the space

PWC have released their annual Global Crypto Regulation Report which provides a comprehensive review of the state of digital asset regulation

Castle Island hosted Tether CEO Paolo Ardoino to discuss stablecoin bills, pursuing an audit, and getting to 400m users

Artemis released their March 2025 Stablecoin Market Update packed full of interesting stats