Circle Bolsters Cross-Chain Push with Interop Labs Tech Acquisition

Circle, the issuer of the second-largest stablecoin by market capitalization, has agreed to acquire the team and proprietary intellectual property of Interop Labs, the initial developer of the Axelar Network according to reports. The deal, expected to close in early 2026, is part of Circle's broader strategy to enhance cross-chain interoperability. This move aims to integrate Interop Labs' technology into Circle's Arc blockchain and Cross-Chain Transfer Protocol (CCTP).

The agreement does not affect the independence of the Axelar Network, which will continue to operate under community governance. The AXL token and the Axelar Foundation will remain unchanged, with the open-source components of the project being taken over by Common Prefix according to reports. Sergey Gorbunov, co-founder and CEO of Interop Labs, is set to join Circle, bringing his expertise to the company's infrastructure development according to the Block.

Circle's acquisition of Interop Labs is a continuation of its 2025 trend of strategic acquisitions aimed at expanding its infrastructure capabilities. Earlier this year, the firm acquired Hashnote, a provider of tokenized money market funds, and has been actively building out its blockchain ecosystem according to reports. The move to acquire Interop Labs is expected to accelerate the development of interoperable assets on Arc and improve developer tools for multichain applications according to Cryptopolitan.

Strategic Implications for Circle's Ecosystem

Circle's acquisition of Interop Labs represents a major step in its cross-chain strategy, aligning with the company's vision of a seamless, interconnected blockchain economy. By integrating Interop Labs' engineering talent and proprietary technology into its Arc blockchain and Cross-Chain Transfer Protocol (CCTP), Circle aims to enable digital assets to move freely across multiple blockchains, including general-purpose chains, sovereign networks, and permissioned systems according to Cryptopolitan. This acquisition is expected to enhance the scalability and usability of Circle's infrastructure, supporting the development of its own on-chain products and services according to LookOnChain.

The Axelar Network, which will remain independent, has been a critical player in the cross-chain space, enabling secure messaging and token transfers across different blockchains. Interop Labs has played a foundational role in the development of Axelar, working closely with open-source developers to refine its core tools according to LookOnChain. With the transition of development responsibilities to Common Prefix, Axelar will continue to operate as an open-source project, maintaining its community-driven governance model according to reports.

Circle emphasized that the acquisition is strictly about the proprietary technology and talent of Interop Labs, with no impact on the open-source components of the Axelar project. This distinction is important, as it ensures that the broader blockchain community continues to benefit from the network's open-source innovations according to LookOnChain.

Broader Trends in Stablecoin and Blockchain Innovation

Circle's move reflects a broader trend among stablecoin issuers to expand their infrastructure and cross-chain capabilities through strategic acquisitions. In 2025, other stablecoin firms have also made significant moves to strengthen their positions in the market. For example, Paxos, the issuer of the Pax Dollar and PayPal USD stablecoins, acquired Fordefi, an institutional crypto wallet provider, in a deal valued at over $100 million according to reports. Tether, the dominant stablecoin issuer, has pursued a different strategy, using its balance sheet to acquire minority stakes in traditional asset businesses according to reports.

These developments come as the global stablecoin market continues to grow rapidly. According to DefiLlama data, the market is currently valued at approximately $310 billion, with USDC holding a 25% share. Stablecoins are increasingly being used for cross-border payments, asset tokenization, and decentralized finance applications. Analysts predict that stablecoin adoption could accelerate in 2026, particularly with the passage of U.S. legislation providing a clear regulatory framework for these tokens according to The Block.

What This Means for Investors and Developers

For investors, Circle's acquisition of Interop Labs signals a continued commitment to innovation and expansion in the blockchain space. The move is expected to enhance the functionality of USDC and other Circle-issued tokens, making them more versatile across different blockchain ecosystems. This could increase the utility and demand for USDC, potentially boosting its market capitalization and overall adoption.

For developers, the integration of Interop Labs' technology into Circle's infrastructure may lead to more robust tools for building multichain applications. The company has outlined three key goals for the acquisition: improving interoperability for assets on Arc, expanding developer tools for multichain apps, and growing its own first-party product development according to Cryptopolitan. These efforts are expected to create more opportunities for developers to build and deploy applications across a variety of blockchain networks.

The acquisition also highlights the importance of interoperability in the evolving blockchain landscape. As the number of blockchain networks continues to grow, the ability to move assets and data across chains seamlessly will become increasingly critical for both developers and end-users. Circle's investment in cross-chain infrastructure positions it to play a central role in this transition.