Circle’s Revenue Under Threat: Hyperliquid’s USDH Stablecoin Could Change the Game

Circle’s $200M Problem

Circle , the issuer behind USDC, has long enjoyed one of crypto’s most reliable business models: interest income from the vast reserves backing its stablecoin. With Hyperliquid now holding $5.5 billion in stablecoins—most of it in USDC—Circle quietly collects roughly $200 million a year in yield.

That revenue amounts to almost 10% of Circle’s annual income, a crucial piece of the narrative that supported its IPO just four months ago at a $19 billion valuation.

But Hyperliquid , a decentralized exchange (DEX) with $700M TVL and higher daily protocol revenue than both $Ethereum and $Solana, has decided to rewrite the rules.

Hyperliquid’s Growing Power

Hyperliquid has become a powerhouse in decentralized trading, but despite its explosive growth, the protocol sees none of the yield generated by the billions of dollars in stablecoins sitting idly on its platform.

$5.5B in stablecoins parked on Hyperliquid today.

• Nearly all of it is $USDC.
• Circle earns interest on those reserves, while Hyperliquid and its users see none of it.

This created the perfect storm for disruption: billions in untouched revenue and a frustrated community.

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Hyperliquid Stablecoin: Enter USDH

Hyperliquid has now proposed its own native stablecoin: USDH.

But USDH isn’t “just another stablecoin.” Whoever issues $USDH must share the yield with the ecosystem. That means:

• Paying validators.
• Funding the assistance pool.
• Buying back and supporting the HYPE token.

At scale, this revenue redistribution could generate over $1 billion annually for the ecosystem. In other words, a complete reversal of Circle’s current monopoly.

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The Bidding War: Who Will Issue USDH?

Hyperliquid’s proposal has sparked one of the fiercest battles in crypto. Multiple heavyweight teams are now competing for the right to issue USDH—and they’re willing to give 95–100% of profits back to HYPE holders.

The Leading Contenders

• Paxos – Binance’s old partner, already regulated under MiCA and the U.S. GENIUS framework.
• Agora – A coalition including MoonPay, EtherFi, LayerZero Labs, and Rain.
• Ethena Labs & others – Several challengers preparing bids.

And then comes the wild card: Stripe.

Stripe, fresh off launching its own layer-1 blockchain Tempo, is rumored to be preparing a bid as well. Tempo is backed by Matt Huang & Paradigm, major investors in Stripe, Tempo, MoonPay, and Agora.

Circle’s Response: “Don’t Believe the Hype”

Circle continues to push USDC inside Hyperliquid and has countered with its own plays:

• Launch of its own L1, Arc, to secure future growth.
• Doubling down on its IPO narrative that USDC’s yield provides a predictable, compounding revenue stream.

But if USDH succeeds, Circle’s business model could take a direct hit, destabilizing nearly 10% of its revenue base.

Why This Is Bigger Than Circle

While the potential $200M loss is massive for Circle, the bigger story is what this battle represents:

1. The War Over Payment Rails

We’re entering a global war for the payment infrastructure of the future. The battlefield now includes:

• Stripe (Tempo)
• Circle (Arc)
• Google (GSUL)
• Tether.io (Plasma)
• Stable

vs.

• Ethereum (which still processes 60% of all stablecoin volume).

The winners of this war will control multi-trillion-dollar value flows over the next decade.

2. Corporate Chains vs. Decentralized Rails

If Stripe does bid for Hyperliquid’s USDH, the fight won’t just be about one protocol’s revenue. It will pit corporate blockchains against decentralized infrastructure, head-to-head.

Banks, Visa, and Mastercard are already under pressure. This showdown could mark the moment when crypto truly becomes the backbone of global payments.

The Bottom Line

Circle could lose 10% of its annual revenue as Hyperliquid launches USDH and redistributes yield back to its ecosystem. But beyond the hit to Circle, this moment may be the inflection point where corporate giants like Stripe and Google collide with decentralized protocols in the battle for global payment rails.

Whether you see this as a fight for fairness, decentralization, or simply a trillion-dollar land grab, one thing is clear:
The stablecoin wars are here.

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