Polymarket, the cryptocurrency-powered prediction market that recently attained a billion dollar valuation, is determining whether to launch its own customized stablecoin or enter a revenue sharing agreement with Circle based on the amount of USDC held on the platform, according to a source familiar with the plans.
The motivation behind Polymarket’s potential stablecoin is to control the yield-generating reserves that support the significant amount of Circle’s USDC dollar-pegged token used for bets on the platform, the source said.
A Polymarket representative stated that no decision has been made regarding the stablecoin.
Recent U.S. legislation regarding stablecoins makes launching one a more enticing business opportunity for both crypto-native firms and traditional finance players interested in the success of stablecoin-issuing companies.
However, creating a stablecoin is a complex task for many firms. USDC issuer Circle is reportedly negotiating revenue sharing deals with exchanges, payment companies, and other fintechs to maintain competitiveness in this swiftly changing landscape.
For Polymarket, issuing its own stablecoin poses fewer regulatory challenges, according to the source.
“Polymarket is locking a lot of stablecoin value in their betting pools and they want a mechanism to obtain the yield,” the source noted. “In Polymarket’s case, it’s a closed ecosystem, and they mainly need to facilitate the exchange of USDC or USDT into their custom stablecoin. They don’t have to handle the last mile on-ramp and off-ramp, which is straightforward to build and easy to secure and control.”
Representatives for Circle did not immediately respond to a request for comment.
The volume of USDC on Polymarket varies with betting activity, with approximately $8 billion in bets placed during last year’s U.S. election cycle, and the website attracted around 15.9 million visits in May, according to RialCenter.
The company is seeking to formally reenter the U.S. market with the acquisition of U.S.-based QCEX, following the closure of investigations regarding its acceptance of U.S.-based customers for betting.
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