Circle's Q2 Revenue Leaps 53%, Stock Surges 11% on New L1 Blockchain Launch

Circle's stock surged 11.4% pre-market after Q2 earnings report, with total revenue and reserve income up 53% YoY to $658mln, driven by a 90% YoY increase in USDC circulation. Circle also announced its own layer-one blockchain, Arc, using USDC as its native gas token, set to launch in public testnet this fall.

Circle Internet Group (CRCL) saw its stock surge 11.4% pre-market on July 2, 2025, following the release of its second-quarter earnings report. The company reported total revenue and reserve income up 53% year-over-year (YoY) to $658 million, driven by a 90% YoY increase in USDC circulation [1].

Circle's CEO, Jeremy Allaire, highlighted the significant growth in USDC adoption and the strategic partnerships with major players such as Binance and OKX. The company's adjusted EBITDA rose 52% YoY to $126 million, exceeding market forecasts [1]. Despite a net loss of $482 million due to non-cash charges related to the company's initial public offering (IPO) in June 2025, Circle's performance was well-received by investors.

A major milestone for Circle was the announcement of Arc, a new open Layer-1 blockchain designed specifically for stablecoin finance, payments, and capital markets. Arc is compatible with Ethereum's Virtual Machine (EVM), enabling developers to build and deploy applications with existing tooling. The blockchain will use USDC as its native gas token, allowing users to pay transaction fees in the stablecoin, and features sub-second settlement finality and opt-in privacy controls [2].

Circle plans to fully integrate Arc with its existing platform while maintaining interoperability with multiple other blockchains. The public testnet for Arc is scheduled to launch in fall 2025, with a full mainnet rollout planned for 2026. The company has also open-sourced the core software and will use a new consensus mechanism, Malachite, developed by Informal Systems, which Circle recently acquired [2].

The launch of Arc reflects a broader trend of companies developing custom blockchain infrastructure to meet the needs of institutional users. The move is also supported by regulatory developments, such as the 2025 GENIUS Act, which have helped to create a more favorable environment for stablecoin-based financial services [2].

Despite the potential, some critics have raised concerns about Arc’s focus on USDC as the native token, suggesting it may limit the diversity of digital assets and DeFi applications typically found on more generalized blockchains. There are also questions about whether centralizing validator incentives through USDC could affect the chain’s decentralization [2].

Nevertheless, Circle remains optimistic about Arc’s potential to drive mainstream adoption of digital dollars. The company believes the blockchain will attract traditional financial institutions by offering predictable costs, regulatory compliance, and enhanced privacy features not currently available on existing blockchains. If successful, Arc could significantly expand the volume of USDC transactions, which already process trillions of dollars annually [2].

References:
[1] https://finance.yahoo.com/news/live/earnings-live-circle-pops-on-higher-revenue-in-first-earnings-report-204250668.html
[2] https://www.ainvest.com/news/circle-q2-revenue-jumps-53-usdc-supply-hits-65-2-billion-arc-blockchain-unveiled-2508/