Quick overview

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Circle is making an effort to boost that momentum. Interest on the cash and bonds backing USDC accounted for about 95% of Circle’s second-quarter revenue, which was a windfall while interest rates were still high. However, Circle aims to diversify and secure a more stable position in digital finance amid the expected economic cuts.

Circle launched Arc, a new blockchain designed to process stablecoin payments, directly competing with Visa, Mastercard, and the cryptocurrency networks it relies on, such as Ethereum and Solana.

Circle intends to manage the system that transfers digital dollars and potentially charge fees for each transaction, rather than just issuing them.

The Circle Payments Network, a system connecting financial institutions, payment companies, digital wallets, and banking apps for instant transfers, was announced in April by the New York-based company.

Arc and CPN work together; one handles orchestration and compliance, while the other settles the actual money transfer. Fees are paid in USDC. Since its IPO, Circle’s stock has surged over 350 percent; however, the company’s outlook hints at a slowdown in growth.

According to David Koning, a senior research analyst at Robert W., non-interest revenue is expected to decline in the second half of the year, and distribution expenses are rising. Baird & Co. reported that Circle spent $407 million, or 62% of its revenue, on revenue-sharing agreements with partners like Coinbase Global Inc. in just the second quarter, aiming to increase USDC adoption.