Circle CEO Unveils USDC Reversal Scenario..."Tether, Be Nervous"

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The head of Circle, the issuer of USDC, emphasized that introducing a reward system based on actual transaction activity instead of interest from simple holdings is a key to ecosystem expansion.

According to a report by the economic media outlet Benzinga on May 12 (local time), Circle CEO Jeremy Allaire stated that a transaction-based stablecoin reward system would be a strong tailwind accelerating USDC adoption. Allaire predicted that the compromise reached by U.S. political circles on the U.S. cryptocurrency market structure bill (CLARITY) would be a significant turning point in determining the future of stablecoins. This bill prohibits passive interest payments similar to bank deposits but allows incentives provided based on actual transactions or user activity.

Allaire made it clear that the success or failure of stablecoins is determined by actual economic activity, not market capitalization. Indeed, since 2026, USDC's adjusted transaction volume has reached approximately $2.2 trillion, overwhelmingly surpassing USDT, which stood at $1.3 trillion. With a market share of 64% based on adjusted transaction volume, USDC has taken the lead over USDT for the first time since 2019. Allaire stated that USDC is solidifying its position as a market-neutral platform that banks, exchanges, and payment companies can build upon without competition.

Circle is also accelerating its global expansion strategy, including the Korean market. Allaire visited Korea last month to sign business agreements with Dunamu and Bithumb, operators of Korea's largest virtual asset exchanges, to explore the potential for local adoption of USDC. This is because demand for business-to-business transactions is expected to surge as major listed companies in Korea show signs of expanding their digital asset investments. Circle is also exploring cooperation methods to provide its issuance and settlement technology in the process of building KRW-based stablecoins being promoted by the Korean financial sector.

The agent economy, including micro-payments between AI agents, was identified as a future growth engine. Allaire predicted that stablecoins would play the role of an invisible financial infrastructure in a world where billions of AI agents autonomously conduct economic activities. This is because blockchain-based stablecoins can efficiently process ultra-small payments, such as those around $0.31, which are difficult for traditional financial networks to handle, without gas fees. To this end, Circle is activating nano-payment features, down to fractional units, on its mainnet, preparing for the upcoming AI era.

Progress on the U.S. cryptocurrency market structure bill is expected to provide a legal basis for institutional investors to confidently enter the USDC ecosystem. Circle is realizing its vision of combining regulatory compliance and technological innovation to implement money not just as a payment method but as a unique data type on the internet. As USDC's circulating supply surpasses $80 billion, accelerating its growth, a new physical law of transaction-based rewards is expected to completely reshape the stablecoin market.

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