Stablecoin provider Circle has raised USDC redemption fees for the second time this year. According to Bloomberg, users wishing to perform rapid redemptions will incur additional fees for transactions exceeding $2 million daily.
Updated Fee Structure
Circle continues to offer tiered redemption options introduced in February. Under the standard redemption plan, a fee of 0.1% was applied to withdrawals exceeding $15 million.
While standard redemptions are processed almost instantly, basic redemptions may take up to two business days to complete. Circle has registered all clients in the standard plan, requiring manual approval for transfers to the basic plan.
New Fee Rates
With the updated fees, standard redemptions will incur charges of 0.03% for amounts between $2 million and $5 million, and 0.06% for amounts between $5 million and $15 million. Sources speaking to Bloomberg expressed concerns that these fees, added in September, could diminish USDC’s appeal in trading.
In the past 30 days, Circle has generated $136 million in fee revenue, placing it among the highest earners in the on-chain business sector. In contrast, competitor Tether has earned $400 million during the same period and charges a fixed fee of 0.1% for redemptions over $100,000.
Market Share Competition
USDC’s market share has dropped from 31% in February to 20% now. This decline is associated with traditional finance players entering the stablecoin market and the emergence of alternative stablecoin options. During the same period, Tether’s market share rose from 52% to 70%.
The new fees highlight the challenges USDC faces in a highly competitive market. Due to rising fees, some users may shift towards alternative stablecoins.
