Circle, the issuer of the USDC stablecoin, has launched xReserve, a smart-contract system designed to enable blockchains to issue their own USDC-backed stablecoins with seamless 1:1 interoperability across supported networks. This new infrastructure, introduced on November 18, represents a significant initiative by Circle to unify fragmented liquidity and reduce reliance on third-party bridges.
The introduction of xReserve coincides with a period of substantial expansion for Circle. The company has recently reported robust growth, increased revenue, rising USDC usage, and notable progress on its Arc blockchain.
Addressing the "Bridged Stablecoin" Challenge
For many years, numerous blockchains have depended on bridged versions of USDC to establish their ecosystems. These bridged stablecoins often introduced different risks, lacked compatibility with native USDC, and resulted in liquidity being confined within isolated pools. Circle asserts that xReserve effectively resolves these challenges by allowing networks to mint their own USDC-backed stablecoins directly against USDC held within xReserve contracts. These minting activities are verified through attestations issued by Circle.
Jeremy Allaire, Circle's CEO, highlighted the launch as a pivotal advancement towards establishing a unified stablecoin standard, describing it as a major step in this direction.
Mechanism of xReserve
The xReserve system operates through a smart contract deployed by Circle, which securely holds USDC. Upon a user depositing funds into this contract, xReserve generates a cryptographic attestation that confirms the deposit. A partner blockchain then utilizes this attestation to mint its own USDC-backed stablecoin. The process for crosschain transfers functions in reverse: tokens are burned on one blockchain, and subsequently re-minted on another after xReserve has verified the transaction. Circle emphasizes that this model is designed to minimize trust requirements, standardize liquidity across different networks, and enhance transparency in interchain stablecoin transfers, an area that has long presented difficulties for developers.
Initial Integrations: Canton Network and Stacks
Circle has confirmed that the Canton Network and Stacks will be the inaugural ecosystems to integrate the xReserve system. Both networks intend to launch USDC-backed stablecoins that are specifically tailored to their unique applications. These applications span a range from institutional settlement services to smart contracts operating on the Bitcoin layer. Circle anticipates further integrations, positioning xReserve as a neutral and extensible foundation that is expected to eventually support a broader range of assets beyond USDC, including EURC.
Circle's Growing Momentum
The launch of xReserve occurs during a period of significant strength for Circle. Financial results for the third quarter of 2025 indicate a substantial 66% increase in revenue, with combined revenue and reserve income reaching $740 million. Furthermore, USDC circulation saw a significant year-over-year increase of 97%, reaching $67.8 billion. The testnet for the Arc blockchain has attracted over 100 participating companies, USDC's market share has climbed to 29%, and the number of wallets holding more than $10 in USDC has grown by 77%, now totaling 6.3 million. Circle has stated that additional blockchains are expected to join the xReserve network soon, thereby expanding a network of interoperable, USDC-backed stablecoins. As the tokenization of payments, settlements, and real-world assets continues to accelerate, xReserve is strategically positioning USDC as the foundational liquidity layer for a future multichain financial system.