Polymarket, a prediction market platform operating on the Polygon blockchain, is preparing to introduce its own dollar-pegged stablecoin. The decision comes after major funding rounds, regulatory hurdles, and growing demand for decentralised finance tools.
The platform, which allows users to trade on the likelihood of real-world outcomes using stablecoins like USDC, gained wide attention during the 2024 U.S. elections. Now valued near $1 billion and backed by investors including Vitalik Buterin and Founders Fund, Polymarket is exploring ways to retain more value within its system while expanding financial autonomy.
Polymarket $3 Billion Expansion
Since its 2020 launch by Shayne Coplan, Polymarket has grown into one of the most active platforms for trading predictions on events such as elections, weather conditions, and economic figures. It works by letting users buy and sell shares linked to potential outcomes, with share prices reflecting the perceived likelihood of each event. During the 2024 U.S. presidential race, over $3 billion was traded as users bet on candidates and key political developments.
In January 2022, the U.S. Commodity Futures Trading Commission fined Polymarket $1.4 million for operating without registering as a Swap Execution Facility. Following that, the platform restricted access for U.S. users. However, reports indicated that many traders continued to participate through workarounds. These regulatory issues shaped the company’s decisions going forward.
By May 2024, Polymarket had raised $70 million in a funding round that included several high-profile backers. With its valuation close to $1 billion, it also made a major acquisition – buying QCX, a CFTC-licensed derivatives exchange, for $112 million. That exchange has since been renamed QCEX. Regulatory tensions eased afterward, with both the Department of Justice and the CFTC ending investigations.
Stablecoin Plan Targets Liquidity and Yield Retention
Polymarket currently uses Circle’s USDC to handle all trading activity on its site, meaning that any reserve earnings go to Circle, not the platform itself. To change that, the company is considering launching its own stablecoin. Users would still be able to deposit using existing tokens like USDC or USDT, but once inside the Polymarket ecosystem, they’d transact with this new native token.
This approach would keep funds in a closed loop, making external payment processing less important. Internally, the shift could allow Polymarket to keep interest generated from user deposits. It would also open the door to better liquidity across its markets and improve user retention by tying participants more closely to the system.
Another path under consideration is a partnership with Circle through a revenue-sharing arrangement. But if Polymarket issues its own coin, it could manage the entire reserve structure itself. This would be legally easier now, following recent changes in U.S. stablecoin laws.
Criticism Over Ethics and Market Manipulation
Despite its growth, Polymarket has faced serious criticism. Governments in Ontario, Belgium, France, Singapore, Switzerland, and Poland either blocked access or issued public warnings against what they viewed as unlicensed gambling. Their concern focused on whether such markets, despite using blockchain technology, fall under strict betting laws due to their nature.
Critics have also raised concerns about the kind of topics Polymarket lists. Bets on wars, wildfires, and celebrity deaths have drawn backlash. The platform was accused of profiting from human tragedy, with a Wired report highlighting a case where users could bet on Ukrainian President Volodymyr Zelensky wearing a particular suit. In that market, 95% of the outcome votes were controlled by a small group of wallet holders, raising questions about vote manipulation.
During the 2024 U.S. elections, there were also signs of artificial activity. One French trader was said to have made leveraged bets worth more than $30 million on Donald Trump using multiple accounts, suggesting wash trading. In March 2025, a controversial market asked whether Ukraine and Trump had agreed to a mineral deal. The market was resolved as “Yes,” despite a lack of official confirmation, triggering more accusations of outcome tampering.
