On June 5 (Eastern Time), the stablecoin industry reached a significant milestone as Circle, the issuer of USDC—the world’s second-largest U.S. dollar-pegged stablecoin—officially went public on the New York Stock Exchange under the ticker symbol “CRCL,” with an initial offering price of $31 per share. On its debut, Circle delivered a strong performance, opening with a 122.58% surge to $66.75 per share, and continuing to climb intraday with a peak gain exceeding 234%, quickly capturing widespread market attention.

Founded in 2013 and headquartered in the United States, Circle is a financial technology company focused on blockchain and payment technologies. Its flagship product, USDC, is a stablecoin pegged 1:1 to the U.S. dollar, widely used for global payments, settlements, and as a digital dollar value store. USDC ranks second in market share among stablecoins, trailing only behind Tether’s USDT. Notably, Circle's successful IPO marks the first of its kind in the stablecoin sector, signaling growing recognition of the stablecoin business model by traditional capital markets.

What Is a Stablecoin?

A stablecoin is a type of cryptocurrency designed to maintain a relatively stable price. Unlike highly volatile cryptocurrencies such as Bitcoin or Ethereum, stablecoins are typically pegged to a more stable asset—most commonly a fiat currency like the U.S. dollar (usually at a 1:1 ratio), but they can also be linked to precious metals or other crypto assets. Stablecoins serve primarily as a reliable store of value and a medium of exchange within the crypto market.

Types of Stablecoins

Based on the type of collateral and the mechanism used to maintain price stability, stablecoins generally fall into three categories:

Off-chain Asset-backed Stablecoins：

These are backed by traditional fiat assets like U.S. dollars or Treasury bills, which are held in banks or trust institutions. Users deposit $1 and receive 1 stablecoin in return; when redeemed, the stablecoin is destroyed, and $1 is returned. While they offer high price stability, they are centralized and dominate the current stablecoin market.

On-chain Crypto-collateralized Stablecoins：

These use other crypto assets as collateral, usually in excess of the value issued, and are fully managed by smart contracts on the blockchain. To mitigate price volatility, the collateralization ratio is typically above 100%. If the collateral value drops below a certain threshold, an automatic liquidation process is triggered.

Algorithmic Stablecoins：

These emerging stablecoins do not rely on traditional collateral. Instead, they use algorithms and smart contracts to adjust supply and demand in order to maintain price stability. The mechanism is complex and highly sensitive to market sentiment, making them riskier compared to collateral-backed models.

Advantages of Stablecoins

In cross-border payments and settlement, stablecoins offer several key advantages over traditional fiat and more volatile cryptocurrencies:

High Efficiency and Speed:

Powered by blockchain technology, stablecoin transactions are available 24/7 and typically settle within minutes. In contrast, traditional international transfers often take 1 to 5 business days to complete.

Lower Costs:

Stablecoins enable peer-to-peer transfers without intermediary banks, significantly reducing transaction fees. A single cross-border transfer may cost just a few dollars—much lower than the $20–50 average fee for traditional SWIFT transfers.

Reduced Exchange Rate Risk:

Because stablecoins are usually pegged to stable fiat currencies like the U.S. dollar, they help mitigate the risk of exchange rate fluctuations, allowing both parties in a transaction to avoid currency conversion losses and improving predictability in cross-border dealings.