Circle Reports Higher Revenue, Expands USDC and Arc Network
Circle reported higher revenue and returned to quarterly profitability as USDC circulation expanded, while the stablecoin issuer positioned its upcoming Arc blockchain as infrastructure for institutional payments and tokenized financial assets.
Summary:
- Circle reported $701 million in Q2 revenue as USDC circulation grew to $73.3 billion.
- USDC onchain transaction volume surged 151% year over year to $14.8 trillion.
- The company unveiled major financial institutions as founding validators for its Arc blockchain ahead of its September 16 mainnet launch.
- Circle also strengthened its regulatory position after securing approval to establish a U.S. national trust bank.
The company generated $701 million in total revenue and reserve income during the second quarter of 2026, an increase of 7% from the same period last year. Net income from continuing operations reached $48 million, compared with a loss of approximately $482 million in Q2 2025, when expenses were heavily affected by stock-based compensation related to Circle’s initial public offering.
Adjusted EBITDA, which excludes selected accounting and non-recurring items, rose 8% year over year to $143 million. The result reflected growth in USDC circulation, partly offset by continued spending on product development, infrastructure and artificial intelligence capabilities.
Circle’s latest figures show that demand for USDC continued to expand despite lower reserve returns and slower activity across parts of the cryptocurrency market.
USDC circulation reaches $73.3 billion
USDC circulation stood at $73.3 billion at the end of the quarter, representing annual growth of 19%. Average circulation during the period increased by 25%, supporting higher reserve income even as the return earned on those reserves declined.
Reserve income rose 5% to $668 million, accounting for the overwhelming majority of Circle’s quarterly revenue. Other revenue, including income from subscriptions and services, increased 41% to $34 million.
The figures underline both the strength and the central vulnerability of Circle’s current business model. A larger supply of USDC gives the company more assets from which to generate reserve income, but the amount earned also depends heavily on interest rates.
Circle said its average reserve return rate fell by 66 basis points from a year earlier. Further declines in short-term interest rates could therefore place pressure on revenue unless they are offset by continued growth in USDC circulation or by a larger contribution from fee-based products.
USDC activity increased more rapidly than its circulating supply. Onchain transaction volume reached $14.8 trillion during the quarter, up 151% year over year.
Transaction volume does not translate directly into revenue because USDC can move between wallets and blockchain applications without Circle charging a fee on every transfer. However, it provides a measure of how widely the stablecoin is being used for trading, settlement, payments and treasury operations.
What drove Circle’s quarterly results?
Circle’s Q2 performance was shaped by several financial and operating developments:
- USDC circulation increased: The amount of USDC outstanding reached $73.3 billion, providing Circle with a larger reserve base from which to generate income.
- Reserve returns declined: The reserve return rate fell by 66 basis points, partially offsetting the benefit of higher average USDC circulation.
- Operating expenses normalized: Reported operating expenses declined 56% to $254 million, largely because the comparable 2025 quarter included substantial IPO-related stock compensation.
- Underlying investment continued: Adjusted operating expenses increased 23% to $146 million as Circle spent more on infrastructure, product development and AI.
- Distribution costs remained high: Distribution, transaction and other costs rose 1% to $412 million, reflecting the payments Circle makes to partners that support USDC adoption and distribution.
The sharp improvement in net income therefore does not indicate that Circle’s operating profit increased by the full $530 million year-over-year difference. Much of the change resulted from the absence of unusually high IPO-related stock compensation recorded in Q2 2025.
Adjusted EBITDA provides a clearer view of the underlying movement, showing growth of 8% rather than the much larger change reflected in GAAP net income.
Circle names institutional validators for Arc
Alongside its financial results, Circle announced the founding group of third-party validators for Arc, its Layer 1 blockchain designed for stablecoin payments, foreign exchange settlement and tokenized assets.
The validator group includes BlackRock, the Depository Trust & Clearing Corporation, Galaxy, Global Payments, Intercontinental Exchange, Mastercard, MoneyGram, SBI Group, Standard Chartered, Sumitomo Corporation and Visa.
Arc is scheduled to launch on public mainnet on September 16, 2026, according to Circle. The network currently has more than 100 institutional and ecosystem builders, and its planned product suite includes privacy features, infrastructure for autonomous software agents and support for tokenized real-world assets.
Validators are responsible for confirming transactions and maintaining agreement over a blockchain’s state. By selecting major financial companies for this role, Circle is pursuing a model in which institutions using the network also participate in securing it.
This structure may make Arc more attractive to banks, payment companies and asset managers that require identifiable counterparties and clearer operational accountability. It also differs from the open validator model used by more decentralized public blockchains, where almost any participant meeting the technical and economic requirements can help secure the network.
Circle described the initial group as a curated cohort, suggesting that institutional credibility and controlled participation are central to Arc’s early design.
BlackRock and DTCC plan integrations with Arc
BlackRock is expected to deploy its USD Institutional Digital Liquidity Fund, known as BUIDL, on Arc. The tokenized fund gives qualified investors blockchain-based exposure to assets including cash and US Treasury securities.
DTCC, which provides clearing, settlement and market infrastructure for the US financial system, is also developing an integration that would support the tokenization of assets held through its Depository Trust Company subsidiary.
These plans matter because the institutional use of blockchain infrastructure depends on more than transferring tokens between wallets. Financial firms also require regulated custody, identity controls, settlement finality, liquidity management and links to existing capital-market systems.
Circle is attempting to place Arc between those traditional systems and blockchain-based markets. If the integrations proceed as planned, the network could support transactions in which tokenized assets and stablecoin-based payments settle through shared infrastructure.
The deployments remain forward-looking, however. Circle said BlackRock was expected to deploy BUIDL and that DTCC would enable tokenization of custodied assets, but the commercial scale and timing of those integrations have not yet been demonstrated on Arc’s public network.
USDC expands through banks and payment companies
Circle also reported several partnerships intended to make USDC easier to access through banks, payment networks and regulated financial infrastructure.
BNY expanded its relationship with Circle by adding USDC minting and redemption to its digital asset custody platform. The bank already serves as the primary custodian for the reserves backing USDC.
Standard Chartered separately introduced integrated USDC minting and redemption, allowing institutional clients to move between fiat currency and USDC through a bank-led onboarding process.
Other developments included a collaboration with Grupo Bind to improve institutional access to USDC in Argentina, an agreement with Nium connecting USDC settlement to payout infrastructure across more than 190 countries, and work with JCB on cross-border treasury transfers and stablecoin payment experiences in Japan.
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Marex also completed what Circle described as the first stablecoin-funded initial margin transaction in regulated derivatives clearing. The transaction allowed an institutional client to post USDC as collateral for derivatives regulated by the US Commodity Futures Trading Commission.
These use cases illustrate Circle’s effort to move USDC beyond cryptocurrency trading. Treasury payments, collateral transfers and cross-border settlement can benefit from the ability to transfer value outside conventional banking hours, but adoption still depends on regulatory approval, redemption access and integration with local financial systems.
Circle Payments Network continues to expand
Circle Payments Network reached $14.7 billion in annualized transaction volume based on activity during the final 30 days of the quarter. That represented quarterly growth of 76%.
The number of financial institutions enrolled in the network increased 29% to 175.
Annualized volume is calculated by extending a shorter period of activity across a full year, so it should not be interpreted as $14.7 billion in completed volume over the previous 12 months. It instead indicates the pace at which the network was operating near the end of Q2.
The network is designed to connect banks, payment companies and digital asset firms using stablecoins for cross-border transfers. Its growth could help Circle diversify beyond reserve income if the company succeeds in generating more transaction and service-based revenue from the infrastructure surrounding USDC.
Federal trust bank approval strengthens Circle’s regulatory position
Circle said it received final approval from the US Office of the Comptroller of the Currency to establish Circle National Trust, a federally chartered national trust bank.
The charter authorizes regulated digital asset custody and could eventually allow the new entity to manage the USDC reserve. Circle also received approval from the New York Department of Financial Services to establish Circle New York Trust as a limited-purpose trust company focused on digital assets.
The approvals do not make Circle a conventional commercial bank. A national trust bank generally operates under a narrower mandate and does not necessarily accept deposits or provide the full range of lending services associated with traditional banks.
Still, federal oversight may strengthen Circle’s position as stablecoin issuers face more formal regulatory and reserve-management requirements. It could also reduce dependence on external providers for selected custody and reserve functions.
Circle’s SEC disclosures continue to identify regulatory changes, stablecoin redemptions, interest-rate fluctuations, competition and reliance on financial partners as material risks to the business. The company also warns that Arc faces execution, cybersecurity, governance and adoption risks as it enters a competitive blockchain market.
Circle is building beyond reserve income
Circle’s second-quarter results show that USDC growth remains the company’s primary financial engine. Reserve income represented roughly 95% of total revenue and reserve income during the period, leaving earnings closely connected to the amount of USDC outstanding and the returns available on reserve assets.
The longer-term strategy is to build additional infrastructure around that stablecoin base. Arc, Circle Payments Network, custody integrations and products for programmable payments could create more diversified revenue sources, although the quarter’s results show that these businesses have not yet displaced reserve income as the company’s dominant contributor.
Arc’s institutional validator group gives Circle a credible list of launch partners, but the network’s significance will depend on actual transaction activity, the value of tokenized assets deployed and whether financial institutions use it beyond controlled pilots.
For investors and the broader digital asset market, the central question is therefore not simply whether USDC can continue growing.
It is whether Circle can convert that circulation into a wider financial network whose economics remain resilient when interest rates decline.
The information presented in this article is intended for informational purposes only and should not be interpreted as financial, investment, or trading advice. Coinspress.com does not promote or advocate for any particular investment strategy, asset, or cryptocurrency project. Cryptocurrency markets are highly volatile and unpredictable – always perform your own research and seek guidance from a qualified financial professional before making any investment decisions.
Alexander Stefanov
Reporter at CoinsPress
Alex is Editor-in-Chief of Coinspress and co-founder of Millennial Media Group, with nearly a decade of experience covering financial markets - crypto first, then everything else. It started in 2016 with Bitcoin. Like most people at the time, he didn't fully understand it - so he kept digging. Blockchain, tokenomics, the projects, the cycles. That curiosity never stopped, and eventually pulled him into traditional markets too: equities, commodities, macro. Not because he left crypto behind, but because you can't properly understand one without the other. What drives him is straightforward: he wants to know why something is happening, not just that it's happening. Most market coverage stops at the headline - price up, price down, here's a chart. Alex finds that kind of reporting actively unhelpful. If you walk away from an article without understanding the mechanism behind the move, what did you actually learn? He holds a degree in Tourism from New Bulgarian University - not the most obvious path into financial markets, but markets have a way of pulling in people who are simply too curious to stay out. He has authored over 200 in-depth analyses and more than 10,000 articles across crypto and traditional finance. He still thinks every day in markets teaches him something new. That's probably why he hasn't stopped.
