(Corrects paragraph 10 to say revenue rose 66% in the quarter, not 76%) By Arasu Kannagi Basil and Pritam Biswas (Reuters) -Circle topped Wall Street estimates for third-quarter profit on Wednesday, driven by higher reserve income amid rising USDC circulation, though shares slipped as valuation concerns weighed on growth prospects. Global adoption of stablecoins — […]
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Circle quarterly profit beats estimates on stablecoin growth
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(Corrects paragraph 10 to say revenue rose 66% in the quarter, not 76%)
By Arasu Kannagi Basil and Pritam Biswas
(Reuters) -Circle topped Wall Street estimates for third-quarter profit on Wednesday, driven by higher reserve income amid rising USDC circulation, though shares slipped as valuation concerns weighed on growth prospects.
Global adoption of stablecoins — digital tokens backed by low-risk assets such as U.S. dollars or Treasuries — is gaining momentum as traditional financial firms roll out new offerings in the space and regulators worldwide move toward clearer rules.
The Trump administration, which pledged to position the United States as a global leader in cryptocurrency, enacted the Genius Act earlier this year, establishing a legal framework for regulating dollar-backed stablecoins aimed at enhancing the safety of digital payments.
“This isn’t just crypto speculation anymore, this is the plumbing of digital finance getting laid brick by brick,” said David Bartosiak, stock strategist at Zacks Investment Research.
Circulation of USDC more than doubled from a year earlier to $73.7 billion in the quarter. Circle, the issuer of USDC, earns reserve income from investing the fiat reserves that back its stablecoin.
In recent months, Circle has struck partnerships with traditional financial institutions and rolled out several initiatives to boost USDC circulation.
Circle shares fell 5% before the bell. The stock has more than tripled from the IPO price since its debut .
“It (stock move) could be due to the still elevated expectation for the growth of USDC reflected in valuation, as well as the potential launch of Arc native token which could impact the adoption of USDC,” Owen Lau, managing director at Clear Street, told Reuters.
On an adjusted basis, Circle earned 36 cents per share in the three months ended September 30, beating analysts’ expectations of 22 cents according to data compiled by LSEG.
Total revenue and reserve income surged 66% from a year earlier to $739.8 million in the quarter, while subscription and services revenue, along with transaction revenue, also posted strong growth.
(Reporting by Arasu Kannagi Basil and Pritam Biswas in Bengaluru; Editing by Krishna Chandra Eluri)