Citigroup Says Rewards Curbs Would Only Slow USDC Adoption

Citigroup said USDC is a U.S. dollar stablecoin issued by Circle whose business model relies on income from reserve assets. Regulatory restrictions on rewards offered by platforms to token holders could reduce incentives to hold USDC in the short term. But the key driver of long-term adoption remains its use in payments, trading and settlement, rather than circulating supply alone.

Citigroup said in its latest report that rewards restrictions would slow but not stop USDC’s expansion and would not damage Circle’s core revenue. The market may be overly pessimistic in its interpretation of the draft regulations, the bank said. The related report did not state the report’s publication date, USDC’s circulating supply or any revenue figures, leaving no verifiable date or monetary data currently available.