Circle Smashes Records: $700M+ Q3 Reserve Income & Hints at Native Token Takeoff

Stablecoin giant Circle just flexed its balance sheet—hard. With reserve income blasting past $700 million in Q3 alone, the message is clear: fiat-pegged crypto isn’t just surviving—it’s printing money.

The Native Token Tease

Now, Circle’s dangling its next play: a proprietary token. Details? Scarce. Implications? Massive. If USDC’s dominance didn’t already have TradFi sweating, this move could turn the heat into a full-blown inferno.

The Cynic’s Corner

Let’s be real—$700M in ‘reserve income’ sounds suspiciously like ‘we parked your cash in T-bills and kept the yield.’ But hey, in a zero-yield dystopia, even crumbs look like a banquet.

One thing’s certain: Circle isn’t circling the drain. It’s circling the wagons for a land grab—and Wall Street’s invited to watch from the sidelines.

Circle’s Financial Disclosures 

According to the financial disclosures made public by the firm on Wednesday, Circle’s Reserve Income surged to $711 million, marking a substantial 60% year-over-year increase, primarily fueled by a 97% surge in the average USDC in circulation.

Furthermore, the financial report revealed that “other revenue” climbed to $29 million, exhibiting a notable $28 million increase year-over-year, on the heels of continuous growth in subscription and services revenue, alongside transaction revenue.

On the expenditure front, total distribution, transaction, and other costs escalated to $448 million, marking a 74% year-over-year increase. This rise was predominantly driven by amplified distribution payments, reflecting higher USDC circulation balances and the growth in Coinbase’s average on-platform holdings of USDC. 

Operating Expenses soared to $211 million, increasing by 70% year-over-year, primarily due to elevated compensation expenses, including $59 million allocated to stock-based compensation expenses in Q3.

The report also highlighted that net income surged to $214 million, marking a 202% year-over-year increase. This figure included an income tax benefit of $61 million attributable to stock-based compensation expense, research and development tax credits, and the impact of recently enacted US tax legislation. 

Adjusted EBITDA also experienced a significant uptick, reaching $166 million, reflecting a 78% year-over-year increase driven by revenue growth from higher USDC in circulation and the inherent operating leverage in Circle’s business model.

Native Token Launch On Arc Network 

Earlier this year, Circle unveiled Arc, a public blockchain tailored for stablecoin transactions, aimed at bolstering cross-border settlements, merchant payments, and decentralized finance integrations. 

Arc, designed as the Circle Layer-1 (L1) blockchain, is geared towards developers and companies seeking to introduce more economic activity on-chain with programmable financial infrastructure for the global economy.

Looking ahead, the stablecoin issuer said it is contemplating the launch of a native token on the Arc network, an initiative envisioned to enhance network participation, drive adoption, align the interests of Arc stakeholders, and bolster the long-term growth and success of the Arc network.

Jeremy Allaire, Co-Founder, Chief Executive Officer, and Chairman at Circle, expressed enthusiasm about the company’s progress, stating: 

Circle continued to see accelerating adoption of USDC and our platform in the third quarter as we build the new Economic OS for the internet… With growing circulation, accelerating commercial partnerships and expanding collaboration across industries, we’re proud of the tangible progress toward a more open and efficient global financial system. 

The firm’s stock, CRCL, which launched earlier this year and trades on the US stock market, is currently trading at $91.57. This represents a notable 7% drop compared to Monday’s trading session.  

Featured image from DALL-E, chart from TradingView.com