The expenses related to Circle’s IPO could weaken the company’s position as the issuer of the second-largest stablecoin, USDC, said Kevin Lehtinitty, CEO of Borderless, in an interview with The Block.

The entrepreneur, who was involved in launching TrueUSD, pointed out that Circle is likely to increase operational costs significantly in 2024 to meet regulatory requirements. In early April, Circle filed a proposal with the SEC for an initial public offering.

According to Lehtinitty, Circle’s competitor — Tether, the issuer of USDT — takes a different approach: “Circle spends a fortune on licenses, compliance salaries, and lobbyists.”

Among the significant expenses, he mentioned $908 million paid to Coinbase for supporting and distributing USDC.

“This is the price not for leadership but for maintaining second place. A crucial warning for new players in the market,” — the expert stated.

He also pointed out that Circle lacks unique advantages in distribution, unlike PayPal, whose PYUSD is seamlessly integrated into the payment giant’s ecosystem.

Among new competitors, he mentioned USD1, a dollar-backed stablecoin from a DeFi platform linked to the Trump family. He suggested that World Liberty could gain “unique advantages” through political support.

“If you’re the President of the United States, you probably get priority,” — he added.

To maintain its position, Lehtinitty believes Circle needs to secure favorable regulatory policies. However, achieving this would require a “crazy budget” for lobbying.

Earlier, the U.S. House of Representatives passed the STABLE Act bill regulating stablecoins. An equivalent document, the GENIUS Act, has also cleared the Senate stage.