Circle’s $182 Million ARC Token Sale Masks Decline in Core USDC Business

Stablecoin issuer Circle has reported third-quarter financial results that significantly outperformed market expectations, though the success was heavily bolstered by a one-time token sale. While many investors track Circle USDC news to gauge the health of the digital asset sector, the company’s latest report reveals a divergence between its emerging blockchain infrastructure and its traditional reserve-based revenue model.

Circle posted an adjusted EBITDA of $317 million, comfortably surpassing the $218 million consensus estimate from Wall Street and the $220 million forecast from Clear Street. However, analysis from the investment bank indicates that this performance was primarily fueled by the ARC token presale, which generated $182 million—exceeding projections by $92 million. When excluding this contribution, Circle’s adjusted EBITDA would have fallen to approximately $135 million, down from the $143 million reported in the previous quarter.

Circle’s quarterly earnings beat was driven by a token presale, masking a decline in core reserve income.

Understanding Circle USDC performance

The same trend is visible in total revenue. While Circle reported a 17% increase to $865 million, the figures would have sat at roughly $683 million without the ARC token contribution, falling below the $740 million recorded during the same period last year. The company’s core reserve business remains under pressure; income from these reserves dropped 8% to $658 million. This decline occurred as the average yield on USDC reserves fell by 61 basis points to 3.5%, a shift that offset an 8% increase in the average circulation of the stablecoin.

Despite the reserve headwinds, CEO Jeremy Allaire highlighted significant growth in USDC adoption across global payment networks. USDC represented 79% of stablecoin transaction volume during the quarter, with on-chain transfers rising 49% to $13.9 trillion. Furthermore, minting and redemptions reached a record $208 billion. The Circle Payments Network, which facilitates cross-border settlements for financial institutions, saw annualized transaction volume reach $41.3 billion by the end of September, a figure that surged past $58 billion shortly after the quarter concluded.

Looking ahead, Circle is expanding its infrastructure through the proposed acquisition of payment provider Tazapay and the launch of its Arc blockchain. These initiatives are intended to support institutional settlement and programmable payments, particularly as the company prepares for the implementation of the GENIUS Act in January.

Why it matters

The results highlight the challenges stablecoin issuers face as they transition from interest-rate-dependent models to broader payment infrastructure businesses. While reserve income remains sensitive to global interest rate fluctuations, the rapid growth in transaction volume suggests a shift toward monetizing utility rather than just asset backing.

For global financial institutions and users, this pivot toward programmable payments and cross-border settlement infrastructure signals a maturing digital dollar ecosystem. As Circle integrates new payment capabilities, the company aims to move beyond simple reserve management to become a foundational layer for regulated digital currency transactions.