Company: CRCL
Filing Date: 2025-05-16
Form Type: S-1/A
Source: 0001193125-25-121234
Chunk: 184

Company: Circle Internet Group, Inc.
Filing Date: 2025-05-16
Form: S-1/A
Chunk 184
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 given the utility of USDC as a means for the exchange of value, an increase in interest rates does not necessarily result in a decrease in USDC in circulation (and vice versa). Any relationship between interest rates and USDC in circulation is complex, highly uncertain, and unproven. As a result, while we are able to predict the impact of interest rate changes on the reserve return rate, given the uncertainties in end-user and customer behavior and interests and market dynamics, we are unable to accurately predict the impact of such changes on reserve income or distribution and transaction costs. In the following analysis, we modeled the impact of hypothetical changes in interest rates on our reserve income and distribution and transaction costs for the twelve-month period following the date of the audited financial statements included in this prospectus (i.e., for the 2025 fiscal year). We assume that the amount of USDC in circulation throughout this period is equal to the amount of USDC in circulation as of December 31, 2024, due to the inherent uncertainties described above in respect of predicting or forecasting USDC in circulation; such changes in interest rates occur on January 1, 2025 and are held constant through the period and impact all reserve assets equally; and our allocation of reserve assets do not change, as we are unable to predict the market and yield reactions to interest rate changes. The table below summarizes the hypothetical impact on our operating results for the year ending December 31, 2025 based on our internal modeling, which are subject to uncertainties and limitations as discussed above (in millions):

| Change in interest rates from average 
 yield of 4.33% in December 2024       |     | Estimated change in reserve income |      |   |     | Estimated change in distribution and 
 transaction costs                    |      |   |
|:--------------------------------------|:----|:-----------------------------------|-----:|:--|:----|:-------------------------------------|-----:|:--|
| +200 bps                              |     | $                                  |  882 |   |     | $                                    |  468 |   |
| +100 bps                              |     | $                                  |  441 |   |     | $                                    |  234 |   |
| -100 bps                              |     | $                                  | (441 | ) |     | $                                    | (234 | ) |
| -200 bps                              |     | $                                  | (882 | ) |     | $                                    | (468 | ) |

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