Circle, the provider of the stablecoin USDC, has increased its redemption fees for the second time this year. As reported by Bloomberg, users seeking to execute swift redemptions will face extra charges for transactions that exceed $2 million on a daily basis.
### Contents
– Revised Fee Structure
– New Fee Rates
– Competitive Landscape
### Revised Fee Structure
Circle maintains a tiered redemption system that was first introduced in February. Under this standard redemption model, a fee of 0.1% applies to withdrawals of more than $15 million. While standard redemptions are processed nearly instantaneously, basic redemptions can take as long as two business days to finalize. All customers have been enrolled in the standard plan, with any transitions to the basic plan requiring manual approval.
### New Fee Rates
With the latest fee adjustments, standard redemptions now carry charges of 0.03% for amounts ranging from $2 million to $5 million and 0.06% for amounts between $5 million and $15 million. Sources cited by Bloomberg have voiced concerns that these newly implemented fees could undermine USDC’s attractiveness in the trading arena. Over the past month, Circle has accrued $136 million in fee revenue, positioning it as one of the top earners in the on-chain industry. In comparison, its competitor Tether has generated $400 million during the same timeframe and imposes a flat fee of 0.1% for redemptions above $100,000.
### Competitive Landscape
USDC’s market share has declined from 31% in February to 20% currently. This drop is linked to traditional financial institutions venturing into the stablecoin sector and the rise of alternative stablecoin options. Conversely, Tether’s market share has increased from 52% to 70% during the same period. The newly adjusted fees underscore the hurdles that USDC encounters in a fiercely competitive marketplace. As fees rise, some users may be inclined to explore alternative stablecoin options.
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### Disclaimer:
The content of this article should not be interpreted as investment advice. Investors should recognize the high volatility and risks associated with cryptocurrencies and are encouraged to conduct their own research.
