Circle, the financial technology firm known for its second-largest stablecoin, USDC, has announced a staggering Q2 loss of $428 million amid a major unveiling. The company revealed its plans for Arc, a new layer-1 blockchain aimed at revolutionizing stablecoin transactions. This comes as the USDC’s circulation nearly doubled over the past year, and on-chain transaction volumes soared to an impressive $5.9 trillion.
Arc: A New Player in the Blockchain Arena
Circle’s Arc blockchain is designed to deliver enterprise-grade solutions for stablecoin payments and capital markets applications. This Ethereum Virtual Machine-compatible network will use USDC as its native gas token, offering sub-second settlement and opt-in privacy controls. A public testnet is slated to go live in the coming months, potentially shaking up the stablecoin landscape.
But Circle isn’t the only game in town. Competitors like Plasma and Stable, as well as the payment giant Stripe with its Tempo chain, are also diving into stablecoin-focused blockchains. Plasma, for instance, recently raised over $373 million in an oversubscribed token sale, showcasing the intense interest and competition in this burgeoning sector. As explored in BTSE’s strategic investment in Stable, the drive to advance blockchain innovation and support stablecoin adoption is gaining momentum across the industry.
Financials in Focus
Circle’s financial journey in 2025 has been anything but smooth. Despite the hefty Q2 loss, the company experienced a 53% increase in total revenue and reserve income, reaching $658 million. This growth was driven by higher average USDC balances and a 28% share of the stablecoin market, marking its first quarter as a publicly traded company.
The losses, however, were largely attributed to items related to its June IPO. Circle’s earnings before interest, tax, depreciation, and amortization (EBITDA) saw a 52% jump to $126 million, reflecting a complex financial landscape that’s both promising and challenging.
Stablecoin Sector Dynamics
The stablecoin sector, valued at $270 billion, is witnessing rapid evolution. The recent enactment of the GENIUS Act by former President Donald Trump established a federal regulatory framework for payment stablecoins, fueling further interest and investment. This follows a pattern of institutional adoption, which we detailed in Coinbase’s debut of an ’embedded’ crypto wallet for developers, emphasizing the sector’s focus on stablecoin integration.
“Circle’s strategy is ambitious,” notes crypto analyst Samantha Liu. “By launching Arc, they’re not just expanding their own ecosystem but potentially setting a new standard for stablecoin operations.”
Circle’s shares have responded well, climbing 6.35% to $171.41 in pre-market trading. Yet, the question remains whether this momentum can sustain amidst stiff competition and regulatory scrutiny.
Looking Ahead
The road ahead for Circle and its Arc blockchain is filled with opportunities and obstacles. The company’s bold move into layer-1 blockchain development positions it uniquely within the industry but also raises questions about scalability and market adoption.
As the stablecoin sector continues to grow, Circle’s innovative steps could redefine market dynamics—if they can navigate the regulatory and competitive challenges effectively. The coming months will be crucial as they roll out Arc’s testnet and aim to cement their place at the forefront of blockchain technology.
Source
This article is based on: Circle Unveils Layer-1 Blockchain Arc, Reports $428 Million Q2 Loss
Further Reading
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- Ethereum proposes unified fee market to simplify transaction costs
Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
