Polymarket, the cryptocurrency-powered prediction market that recently attained a billion dollar valuation, is deciding whether to introduce its own customized stablecoin, or accept a revenue sharing deal with Circle based on the amount of USDC held on the platform, according to a person familiar with the plans.
Polymarket’s motivation to create its own stablecoin is simply to own the yield-generating reserves that back the large amount of Circle’s USDC dollar-pegged token used to make bets on the popular betting platform, the person said.
A Polymarket representative said no decision has yet been made on the stablecoin question.
Legislation around stablecoins passed in the U.S. last week makes issuing a stablecoin all the more attractive a business proposition for both crypto native firms and more traditional finance players alike who may be eyeing the success of stablecoin-issuing giants Tether and Circle.
That said, launching a stablecoin is a complex lift for many firms, and USDC issuer Circle is known to be cutting revenue sharing deals with exchanges, payment firms and other fintechs in order to stay competitive in the rapidly evolving space.
For Polymarket, issuing its own stablecoin is a much easier lift from a regulatory standpoint, according to the source.
“Polymarket is locking a lot of stablecoin value in their betting pools and so they want some kind of mechanism to get the yield,” the person said. “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. That’s a very simple thing to build, and easy to secure and control.”
Spokespeople for Circle did not immediately return a request for comment.
The amount of USDC on Polymarket fluctuates with betting activity on the platform, but some $8 billion of bets were placed during last year’s U.S. election cycle, and the website attracted some 15.9 million visits in May, according to SimilarWeb.
The company is looking to formally reenter the U.S. with the acquisition of U.S.-based QCEX, following the closure of civil and criminal investigations into its allowing U.S.-based customers to place bets on its platform.