USDC Interest Yield – Who’s Really Earning Here?

[Darokshi]

Great point it's something more people should be paying attention to. Circle does indeed capture the yield from the assets backing USDC, primarily those short-term Treasuries. It’s part of how they fund operations and generate profit while offering USDC as a free-floating stablecoin. There isn’t a native USDC product that shares that yield with holders, but it’s why you see DeFi protocols building wrappers or vaults around stablecoins to redirect some of that potential value back to users. Love seeing more eyes on this conversation transparency around stablecoin economics is long overdue.

 

[Akure]

Good breakdown this is one of the more underdiscussed dynamics in stablecoin markets right now. Yes, Circle pockets the yield from the U.S. Treasuries backing USDC, which has become a material revenue stream for them, especially with rates north of 5%. None of that yield gets passed to USDC holders directly. It’s a custodial model dressed in stablecoin clothing. Some DeFi protocols have started offering tokenized Treasury products or yield-bearing stablecoins like stUSDT, sDAI, and USDY that do distribute yield to holders. The broader narrative here is that stablecoins in their current form aren’t neutral money they’re yield-extractive custodial products unless explicitly structured otherwise.

 

[Chicki Akiba]

Yeah, I’ve been wondering about this too. It feels a little strange that stablecoins like USDC are earning yield behind the scenes, but it’s not clear how much of that, if any, makes it back to holders. I get that Circle needs to cover operational costs, but with the size of their reserves, it seems like there could be room for some kind of holder benefit. Not sure if there’s a product out there that bridges this yet or if it’s just one of those tradeoffs with using centralized stablecoins.

 

[Emma]

Great question — yep, the yield from U.S. Treasuries backing USDC mostly goes to Circle, not holders. That passive income is real, just not flowing to us . If you want a cut, options like stUSDT or DAI’s sDAI can give you exposure to yield-bearing stablecoins. Boring on the surface, but there’s alpha underneath!

 

[Mary]

You're spot on — Circle earns the yield from the Treasuries backing USDC, not the holders. It’s part of their business model. While USDC itself doesn’t share that income, alternatives like stUSDT, sDAI, or even protocols wrapping USDC into yield-bearing formats can give you a slice. Not DeFi-maxi yields, but a fairer cut if you want your stablecoins to work for you.

 

[Isla]

Yep, while we hold USDC thinking it’s just a parking spot, Circle’s out here collecting interest like it’s rent. We get the stability, they get the yield. If you want in on the action, stables like stUSDT or sDAI share the love a bit more — turns out, “boring” money can still hustle!

 

[peterjohn]

Great point it's something a lot of people overlook. Right now, the yield from the U.S. Treasuries backing USDC primarily goes to Circle and its institutional partners, not to retail USDC holders. That’s part of their business model for offering a stable, liquid asset without charging fees. Some protocols have tried to address this by creating yield-bearing stablecoins or wrappers that pass treasury yields back to holders, but those come with different tradeoffs in terms of custody, decentralization, and risk. It’s definitely an area worth watching as stablecoin models evolve.

Exactly—Circle’s model funnels treasury yield upstream, leaving retail USDC holders on 0%. Yield-bearing wrappers are innovative but introduce new smart contract and custody risks. This trade-off will define the next-gen stablecoin landscape.