US interest rate cuts could slash Circle’s annual gross revenue by up to $618 million. The cuts, expected in September, would also slash gross profit by $303 million. Circle recently announced the debut of Arc, an EVM-compatible Layer-1 blockchain. Stablecoin giants Tether and Circle face a revenue challenge as upcoming US interest rate cuts threaten to reduce the substantial income they earn from interest-bearing US Treasurys. MartyParty, a crypto analyst on X, warned that when interest rates drop, both issuers will “lose a lot of revenue” because they rely heavily on yield from their Treasury holdings. Circle and Tether will need to issue more stablecoins to maintain their current revenue. This is probably why they decided to launch their own chain to generate revenue, since there are rumors of rate cuts starting in September, said the analyst. Revenue at Risk According to internal financial projections shared in MartyParty’s post, a 50 basis point (bps) cut in interest rates would reduce Circle’s gross revenue by $309 million annually, while a 100 bps cut could wipe out $618 million. Source: MartyParty on X Gross profit would fa… The post Rate Cuts Threaten Profits of Stablecoin Giants Tether and Circle appeared first on Coin Edition .
