Driven by USDC Growth, Circle Returns to Profitability in Q2

Circle generated $701 million in revenue in the second quarter of 2026. This annual growth of 7% is mainly based on the expansion of USDC. The stablecoin circulates more and processes many more transactions, even though falling rates gradually reduce the yield on reserves.

USDC remains the main financial driver of Circle

Circle’s business model still largely depends on the assets that guarantee USDC parity. This dependency explains why the company seeks to strengthen its regulatory status with its project for a fiduciary bank dedicated to USDC. In the second quarter, revenues from reserves reached $668 million, over 95% of the total published.

These revenues increased by 5% year-on-year. The rise mainly comes from a 25% increase in the average outstanding USDC, raised to $76.5 billion. At the end of the quarter, 73.3 billion USDC remained in circulation, an annual growth of 19%.

This growth was however slowed by the decrease in reserve yields. It fell to 3.5%, down 66 basis points. Circle therefore earns more thanks to the increase in the number of USDC in circulation, but each dollar placed in its reserves yields less than a year ago.

The crypto company also returned to profitability. The net income from continuing operations reached $48 million, an annual improvement of $530 million. This jump mainly reflects the disappearance of many exceptional expenses linked to the 2025 IPO. Adjusted EBITDA increased more modestly by 8%, to $143 million.

Crypto transactions grow much faster than supply

The most spectacular figure does not come directly from revenues. The quarterly volume of USDC transactions jumped 151% to reach $14.8 trillion. Activity is therefore increasing much faster than the quantity of tokens in circulation.

This difference indicates that USDC moves more quickly between wallets, platforms, DeFi applications, and payment infrastructures. The stablecoin no longer serves only to temporarily store funds waiting for a new opportunity in the crypto market. It becomes a tool for settlement, transfer, and treasury management.

The integration of USDC by Standard Chartered illustrates this institutional evolution. Companies can use the stablecoin to move liquidity on blockchains while maintaining traditional banking procedures. Circle thus benefits from new distribution channels without having to build each gateway with traditional finance alone.

During the quarter, Circle created 83 billion USDC and destroyed 87 billion following redemption requests. The number of wallets holding more than $10 increased by 24%, to 7 million. Its market share of dollar-backed stablecoins remains close to 27%, despite a slight decline of 66 basis points.

Circle must now reduce its dependence on rates

The results show a stronger company, but still exposed to central bank decisions. When rates fall, Treasury bonds and other safe assets that make up reserves yield less. USDC growth must then offset this pressure to maintain revenues.

Circle is therefore attempting to broaden its model. Its subscription and service revenues grew 41%, but they still represent only $34 million. The group is also preparing the public launch of Arc, its blockchain intended for programmable payments, tokenized assets, and institutional uses.

This diversification could transform Circle into a comprehensive financial infrastructure rather than a simple stablecoin issuer. However, it requires significant investments in products, artificial intelligence, and security. Adjusted operating expenses increased 23% during the quarter.

The paradox remains clear. The stablecoin market is experiencing its worst contraction since the Terra collapse, even as their transactional use continues to accelerate. Circle benefits precisely from this shift. Its future will depend less on the number of USDC held passively than on their actual circulation in the crypto economy. The $701 million for the quarter demonstrate the power of the current model. They also show why Circle must quickly build revenues less sensitive to interest rates.