Circle Reports Q2 Loss, Launches Enterprise-Grade Blockchain Arc

Circle, the second-largest stablecoin issuer, reported a $428 million Q2 loss despite a 100% increase in USDC circulation and a 5x increase in on-chain transaction volume to $5.9 trillion. The company is developing a layer-1 blockchain, Arc, designed for stablecoin payments, FX, and capital markets applications. Circle's USDC share of the stablecoin market rose to 28%, with total revenue and reserve income increasing 53% to $658 million.

Circle Internet Group (CRCL), the second-largest stablecoin issuer, reported a $428 million loss in Q2 2025, despite a significant increase in USDC circulation and on-chain transaction volume. The company's USDC share of the stablecoin market rose to 28%, with total revenue and reserve income increasing 53% to $658 million [1].

Circle's Q2 loss was attributed to the company's aggressive expansion and investment in new technologies, including the development of Arc, a layer-1 blockchain designed for stablecoin payments, FX, and capital markets applications [2]. The company's USDC circulation surged 100% year-over-year to $61.3 billion, and on-chain transaction volume increased 5x to $5.9 trillion [3].

Despite the loss, Circle's CEO, Jeremy Allaire, framed the quarter as a "pivotal moment" for the company and the broader adoption of stablecoins. He highlighted the company's sustained growth and accelerating interest in building on stablecoins and partnering with Circle across various sectors of the financial industry [3].

Circle's revenue growth was driven by a 90% increase in USDC circulation and a 5.4x year-over-year increase in on-chain transaction volume. The company's reserve income, comprising $634 million of Q2's total revenue, increased due to higher average USDC in circulation [3].

The company's most ambitious infrastructure play, Arc, aims to enhance transaction efficiency and interoperability in the stablecoin ecosystem. Arc offers sub-second settlement, USDC as native gas, an integrated foreign exchange (FX) engine, and opt-in privacy features [2].

Circle's partnerships with major internet companies and commercial entities, as well as collaborations with Binance, OKX, Corpay, FIS, and Fiserv, have expanded USDC's role in payments, FX, and banking [3]. The company's strategic ambition is to turn USDC into a default settlement layer for global commerce, similar to Visa and Mastercard.

Circle's trajectory is worth close attention, as it may redefine how corporate money moves if it can maintain its regulatory lead, expand its infrastructure, and prove that USDC can move billions of dollars daily without hiccups [3].

References:
[1] https://www.investors.com/news/circle-earnings-q2-2025-crcl-stock-stablecoin-usdc/
[2] https://en.coinotag.com/circles-usdc-to-power-new-layer-1-blockchain-arc-aiming-for-enhanced-stablecoin-finance-solutions/
[3] https://www.pymnts.com/earnings/2025/circle-usdc-volume-hits-6-trillion-dollars-race-first-mover-advantage/