Polymarket Considers Launching Its Own Stablecoin to Reclaim Yield from Circle's USDC Reserves: Are We Heading Toward a Crowded Stablecoin Market?

Polymarket Eyes Custom Stablecoin To Capture Yield Lost To Circle

Polymarket, the fast-growing crypto prediction platform, is actively exploring a move that could reshape its business model—either by launching its own stablecoin or entering into a revenue-sharing deal with USDC issuer Circle.

The goal is to take control of the interest earned on the sizeable reserves currently benefiting Circle.

The deliberations come as the stablecoin landscape heats up, with recent US legislation making it easier for firms to issue their own regulated digital dollars.

A person close to the discussions said that Polymarket is considering issuing a custom stablecoin to capture that yield in-house.

“Polymarket is locking a lot of stablecoin value in their betting pools and so they want some kind of mechanism to get the yield.”

Stablecoin Choice Could Redefine Platform Economics

Every transaction on Polymarket currently settles in USDC on the Polygon network.

With betting volumes reaching $8 billion during the last US election cycle and over $1 billion monthly volume recorded in May alone, the platform is holding significant stablecoin reserves.

A representative for the company told CoinDesk that “no decision has yet been made.”

However, creating a stablecoin internally may prove simpler than expected.

According to the source,

“In the case of Polymarket, it’s a closed ecosystem and all they really need to do is to be able to exchange USDC or USDT into whatever their custom stablecoin is. They don't have to worry about the last mile on ramp and off ramp.”

This model allows Polymarket to maintain full control over its liquidity, reserve yield, and user flow—without depending on external stablecoin providers.

Circle Revenue Deals Reportedly Drying Up

Polymarket's options are also influenced by broader changes in the stablecoin business.

Circle, which issues USDC, is said to be pulling back from revenue-sharing deals with fintech platforms and exchanges as competition intensifies.

That makes a partnership with Circle potentially less lucrative over time.

While such agreements once allowed platforms to earn a portion of interest generated from reserves, Circle is reportedly shifting focus to retain more of that margin.

Polymarket’s US Expansion Adds Momentum

The firm is also preparing to reenter the US market through a proposed $112 million acquisition of QCEX, a licensed US exchange and clearinghouse.

This follows the closure of civil and criminal investigations tied to unauthorised bets from American users.

With legal barriers cleared, Polymarket is positioning itself for broader expansion.

It also plans to revamp its rewards and oracle resolution system as part of its 2028 Election Holding Rewards initiative, aiming to offer improved pricing models and better user migration tools.

In May, the site recorded nearly 16 million visits, highlighting its growing popularity and potential reach in future regulatory environments.

A Platform-Backed Stablecoin May Be Easier Than It Seems

Launching a stablecoin can be an uphill climb for many firms—but in Polymarket’s case, the internal architecture makes the process more feasible.

The platform already manages stablecoin-based flows within its network, meaning any switch to a proprietary token could happen with minimal infrastructure changes.

And unlike open-ended fintech services, Polymarket doesn't require external off-ramps or banking integration to serve its user base—lowering the compliance and technical hurdles involved.

Is Every Platform Becoming Its Own Bank?

With the passage of the GENIUS Act and growing demand for stablecoin-based services, more companies—from Wall Street banks to DeFi apps—are launching their own digital dollars to capture yield and strengthen their ecosystems.

The trend promises more innovation, lower fees, and deeper integration into platforms. But it also raises critical questions for users and regulators.

But does every platform need a stablecoin?

With every company minting its own dollar-pegged token, liquidity could fracture, trust may become harder to maintain, and users could be left navigating a maze of lesser-known coins with varying backing models and risks.

While a closed ecosystem like Polymarket’s may be well-suited for such a token, the broader proliferation of stablecoins might not benefit users as much as it benefits platforms seeking yield.

As more platforms move in this direction, the stablecoin market may soon resemble an archipelago of walled gardens, each chasing the same yield—but on very different terms.

Eventually, it will no longer be who can launch a stablecoin, but who can earn and keep the trust that makes one valuable.