Stablecoin issuer Circle has raised its fees for redeeming its USD Coin (USDC) for the second time in less than a year.
According to an Oct. 29 Bloomberg report, since September, the company has been collecting fees on daily redemptions of at least $2 million.
In February, Circle introduced swap charges for redemptions above $15 million through its Circle Mint platform.
The new fees begin at 0.03% per transaction and escalate to as much as 0.1% for withdrawals above $15 million, primarily affecting institutional investors and high-volume traders. According to unnamed sources, the revision seeks to address to the increased demand for liquidity as more institutions tap into digital assets.
Traders can still redeem USDC without fees if they are willing to wait up to two days for the cash transfer.
With tighter competition in the stablecoins market, Circle is moving ahead with its plans for an initial public offering (IPO) and is set to relocate its headquarters to Wall Street by 2025. The company filed for an IPO in January, pending approval from the US Securities and Exchange Commission (SEC).
Related: Fed’s dovish move will slash $625M in interest income for stablecoins
Circle’s bid to position its USDC as the regulated alternative to the digital US dollar includes reaching foreign markets. The company announced in September the integration of its stablecoin with the national banking systems of Brazil and Mexico, enabling businesses in these countries to access USDC in real time through local financial institutions.
Despite the initiatives, Circle has seen its market share decline over the past two years following US regulators’ crackdown on crypto firms in response to FTX’s collapse.
Stablecoin market dominance. Source: DefiLlama
According to data from DefiLlama, USDC has a market capitalization of $34 billion at the time of writing for a total market share of less than 20%. Meanwhile, its biggest competitor, Tether (USDT), boasts a market capitalization of $120 billion, with a nearly 70% market share. Tether applies a 0.1% fee for minting or redeeming USDT transactions exceeding $100,000.
BlackRock and Robinhood are also eyeing the stablecoin market. While the asset manager is planning to use its tokenized fund token BUIDL as collateral for derivatives trading, the fintech is exploring a stablecoin under the European Union regulatory framework.
Related: Stablecoins and the dollar: Allies or adversaries in the new financial era?