Higher Reserve Income Drives Growth
Circle (CRCL.N) reported a 66% rise in third-quarter revenue on Wednesday, lifted by higher reserve income from its U.S. dollar-backed stablecoin, USDC, as circulation more than doubled from a year earlier. Total revenue and reserve income reached $740 million for the three months ended Sept. 30, compared with $446 million a year ago. The company earned $214.4 million in net profit for the quarter, up sharply from $71 million a year earlier. Circle said growth was driven by the expansion of USDC’s use across payment platforms, trading venues and decentralized finance applications. USDC’s supply climbed to $73.7 billion, its highest level in over a year, reflecting broader global adoption of regulated stablecoins. The firm earns income from the interest generated on the fiat reserves backing each token.
Investor Takeaway
Circle’s revenue surge underscores the profitability of stablecoin reserve yields but also highlights the firm’s exposure to future interest rate cuts.
Regulatory Context and Market Expansion
The results come as demand for stablecoins accelerates worldwide, spurred by traditional financial institutions and new regulatory clarity. Earlier this year, the U.S. government enacted the Genius Act, the first federal framework for dollar-backed stablecoins, aimed at safeguarding digital payment systems. The law’s introduction has encouraged more banks and fintech firms to integrate tokenized dollars into their platforms. Stablecoins, digital tokens backed by assets such as U.S. dollars or Treasuries, have become one of the fastest-growing areas of the crypto market, offering instant settlement and price stability. USDC competes with Tether’s USDT, the largest stablecoin by market value, which has also seen a rise in circulation in 2025. “Global adoption of stablecoins is gaining momentum as regulators move toward clearer rules,” Circle said in its statement. The company noted that adoption is being driven by both consumer payments and institutional settlements.
Expenses and New Investments
Despite the revenue jump, Circle’s stock fell 3% in pre-market trading after the company raised its full-year adjusted operating expense forecast to between $495 million and $510 million. The increase reflects higher spending on product development and payroll taxes as the company expands operations. Executives said Circle is investing heavily in new infrastructure to diversify revenue beyond reserve income, which could come under pressure once interest rates begin to fall. The company launched Arc earlier this year, a public blockchain network designed for stablecoin transactions and settlement. Arc is intended to support merchant payments, cross-border transfers and decentralized finance applications. Meanwhile, Arc could help Circle reduce its reliance on interest income by creating fee-based revenue streams tied to blockchain usage and integrations with financial institutions.
Investor Takeaway
Circle’s profitability is tied to U.S. yields. Expanding into payment infrastructure and blockchain settlement could help offset declining interest margins in 2026.
Looking Ahead
That said, Circle’s results are an indicator of stablecoins’ growing role in mainstream finance. With regulators in the U.S., EU and Asia developing frameworks for tokenized money, Circle and Tether remain positioned at the center of the market’s next growth phase. While rate cuts may curb income from reserves, Circle’s move into infrastructure and blockchain development could provide a more sustainable growth model. The company said it will continue to build out partnerships with global banks, payment providers and fintech platforms seeking stablecoin integration. USDC’s rising circulation and profitability show how tokenized dollars have become a key source of revenue for digital asset firms adapting to the regulatory era of crypto finance.