- Key insight: Circle’s main revenue uplift was its sale of Arc tokens for its open blockchain network, which brought $182 million to the quarter’s earnings report.
- Supporting data: Reserve income decreased 8% YoY as its return rate fell by 61 basis points to 3.5%.
Circle’s launch of its blockchain network this quarter buoyed its earnings as it is preparing for an increase in stablecoin adoption.
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“We are approaching an extraordinary inflection point,” Circle CEO Jeremy Allaire told investors in the company earnings call on Wednesday. “In January, the GENIUS Act goes into effect. That is the moment when digital dollars become a federally recognized part of the U.S. dollar financial system. Circle is made for this moment. This is a turning point in the global adoption of digital currency, and we hold the leadership position.”
Allaire also called Circle’s stablecoin, USDC, “the world’s largest
In its most recent earnings report, Circle purported that its USDC stablecoin carried 79% of all stablecoin transaction volume. The company also reported $865 million in total revenue and reserve income, which was a 17% increase year-over-year.
Of that, $658 million was attributed to reserve income, which actually decreased from this time last year by 8% as Circle’s reserve return rate fell by 61 basis points year-over-year to 3.5%.
“USDC’s stock, either circulation of USDC or the amount of USDC in the world, has been relatively flat for a few quarters,” Circle Chief Financial Officer Jeremy Fox-Geen told American Banker in an interview. “Over those few quarters, we have experienced, until recently, rate cuts. Flat USDC in a falling rate puts downward pressure on reserve income.”
The Federal Reserve has
“People are increasingly choosing to use USDC when they use a stablecoin,” Fox-Geen said. “As more of the world’s economic activity takes place using these new money technologies, we anticipate that the supply of USDC will follow along and grow just as the flow and transactions of USDC have been growing. If that trend continues, we’ll be in a very good place.”
Other revenue, which totaled $207 million, was largely lifted by a one-time private presale of $182 million in tokens for Circle’s Arc blockchain network, which was
“The biggest driver of the beat is the revenue related to pre-sale of Arc tokens, which appears to have materialized fully in the third quarter versus our expectation for it to be distributed across the second half of the year,” Keefe, Bruyette and Woods analysts said in a research note.
William Blair analysts said in a research note that, “Circle is not generating material transaction revenue,” but they believe that may change over the next several quarters.
“The company detailed how it will generate Arc revenue as the chain transitions to proof of stake,” the analysts continued. “We also anticipate that the integration of Circle Payments Network into Arc as the primary settlement layer will increase its attractiveness for treasury management, cross-border payments and tokenized real-world asset settlement.”
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Circle previously announced the acquisition of Singaporean payments firm Tazapay, which is expected to close next year, ahead of this quarter’s earnings. The deal will connect Circle Payments Network (CPN) to around 100 payout markets in the APAC region through roughly 60 bank and fintech partners, according to the company.
Allaire said in the company earnings call on Wednesday that “the last mile, where a payment lands in a local currency in someone’s account, is critical in delivering value in global payments. Tazapay expands CPN’s footprint, deepens our fiat connectivity and adds new capabilities for the payment providers and financial institutions building on CPN.”
William Blair analysts affirmed that “the pending Tazapay acquisition will expand Circle’s global reach and augment the burgeoning home-grown stablecoin movement and tokenized real-world asset settlement capabilities.”
The stablecoin issuer also revealed a 5% reduction in its workforce in its third-quarter report, for which it attributed a one-time $9.1 million restructuring cost in its earnings.
Circle said in the report that the layoffs were “designed to better align our organizational structure with our operating model.” The company did not say precisely how many employees were affected, but Circle had a total of “approximately 1,100 employees” at the end of 2025 according to its most recent
