Key Highlights:
- Circle’s Q2 report reveals a net loss of $482 million, with a revenue of $658 million.
- The company announced Arc, a new layer-1 blockchain set to streamline stablecoin payments, foreign exchange (FX), and capital markets.
- Circulation of the USDC stablecoin surged by 90% YoY, achieving a market share of 28% with a total of $5.9 trillion in on-chain transactions.
Circle reported a substantial loss in the second quarter, even with the USDC stablecoin’s circulation almost doubling from last year. The increase in on-chain transaction volume soared more than fivefold, leading to a total of $5.9 trillion. The company is developing a layer-1 blockchain aimed at providing an enterprise-grade foundation for stablecoin transactions. A public testnet for Arc is projected to be launched in the upcoming months.
Additionally, Arc will be EVM-compatible and will utilize USDC as its gas token, featuring a built-in stablecoin FX engine and offering sub-second transaction speeds. Importantly, this blockchain will also incorporate privacy options.
Circle is not alone in this focus area; other projects like Plasma and Stable are also venturing into stablecoin-targeted blockchains, joined by notable players like Stripe, which is developing its own payment-focused blockchain called Tempo.
Despite the positive growth of USDC, Circle incurred a significant loss attributed to various issues linked to its recent IPO, resulting in a reported net loss primarily due to non-cash expenses. Interest within the stablecoin market has intensified following legislative movements such as the GENIUS Act, promoting a federal regulatory framework for payment-related stablecoins in the U.S.
Shares of Circle displayed a healthy response, rising 6.35% in pre-market trading.
