(Reuters) -Circle reported a 66% increase in third-quarter revenue on Wednesday, driven by higher reserve revenue from its flagship USDC product as stablecoin circulation increased.
Global adoption of stablecoins – digital tokens backed by low-risk assets such as the US dollar or Treasury bills – is gaining momentum as traditional financial companies roll out new offerings in the space and regulators around the world move towards clearer rules.
The Trump administration, committed to positioning the United States as a global leader in cryptocurrency, signed the Genius Act into law earlier this year, establishing a legal framework to regulate dollar-backed stablecoins aimed at improving the security of digital payments.
Circle, which issues USDC, earns reserve income by investing the fiat reserves that back the stablecoin.
Circulation of USDC – backed by the US dollar – more than doubled from the previous year to $73.7 billion.
Circle reported total revenue and reserve income of $740 million in the quarter ended September 30, up from $446 million a year earlier.
The stock fell 3% before the bell as Circle raised its adjusted annual operating expense forecast from $495 million to $510 million, citing growing investments to build its platform and higher payroll costs.
The company is also looking to diversify its revenue streams as rate cuts are expected to put pressure on its reserve revenue.
Earlier this year, Circle announced the deployment of Arc, a public blockchain designed specifically for stablecoin transactions, that would help the company leverage cross-border settlements, merchant payments, and decentralized financial integrations.
The company reported net income of $214.4 million in the third quarter, compared with a profit of $71 million a year earlier.
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