The Leading Stablecoin Issuer Circle Releases Q3 Financial Report: What are the Key Highlights?

By: blockbeats|2025/11/13 10:00:01

Original Article Title: "Circle Q3 Report Card: Playing Chess for the Next Move?"

Original Article Author: KarenZ, Foresight News

Last night, the leading stablecoin issuer Circle released its third-quarter financial report, delivering impressive results and making significant strides in ecosystem development. At the same time, Circle revealed its progress in building the Arc Network and CPN payment network.

Here are some key highlights from this financial report:

1. USDC Supply: 108% Year-over-Year Growth

By the end of the third quarter, USDC's circulation reached $73.7 billion, a remarkable 108% year-over-year growth, reflecting the overall expansion of the stablecoin market.

Simultaneously, USDC's market share has reached 29%, a 643 basis point increase compared to the same period last year. Among many stablecoin competitors, USDC has become a key player second only to USDT. This increase in market share indicates a continuous rise in user trust in USDC.

2. Net Profit: $214 Million, 202% Year-over-Year Growth

This directly drove a significant increase in the company's total revenue and reserve interest income, reaching $7.4 billion, a 66% year-over-year growth. Of this, reserve interest income contributed $7.11 billion, a 60% year-over-year growth, becoming a core revenue pillar, largely due to the increase in USDC circulation.

Of particular note is the performance on the profit side. Circle achieved a net profit of $214 million in the third quarter, a 202% year-over-year growth. This high growth is partly due to the expansion of the business scale and also includes tax benefits and the decrease in the fair value of convertible bonds.

While other income is relatively small in scale, its growth is impressive, reaching $28.518 million, a more than 50x increase from the same period last year, mainly driven by robust growth in subscription services and transaction revenue.

3. Arc Network: Circle is Exploring the Possibility of Launching a Native Token on Arc

Circle has indicated that it is exploring the possibility of issuing a native token on the Arc Network. Circle launched the Arc public chain testnet on October 28, attracting participation from over 100 companies. These participants span institutions from various sectors such as banking, payments, capital markets, asset management companies, technology, and different segments of the digital asset ecosystem.

Circle hopes that the Arc token can drive network adoption, further aligning the interests of Arc stakeholders.

IV. CPN Payment Network: Annualized Transaction Volume Reaches $34 Billion

Since its launch at the end of May this year, 29 financial institutions have joined Circle's payment network, the Circle Payments Network (CPN), with another 55 in the process of approval and 500 more preparing to join. Currently, CPN supports fund flows in 8 countries.

Based on a 30-day rolling transaction volume as of November 7th, CPN's annualized transaction volume could reach $34 billion, demonstrating strong institutional demand.

In addition, Circle has established new partnerships with companies such as Brex, Deutsche Börse Group, Finastra, Fireblocks, Hyperliquid, Kraken, Unibanco Itaú, and Visa, further enhancing USDC's position in global payments and financial infrastructure.

V. USYC Tokenized Currency Market Fund: Reaches $1 Billion in Size

Circle's USYC tokenized currency market fund has also shown outstanding performance, growing over 200% from June 30, 2025, to November 8, 2025, reaching approximately $1 billion. This reflects the potential of combining digital assets with traditional finance.

VI. Fiscal Year 2025 Outlook

Building on a strong Q3 performance and market demand growth, Circle has raised its other revenue expectations from the original $75-85 million to $90-100 million, mainly driven by continued growth in subscription services and transaction revenue; RLDC profit margin expectations will reach 38% ("revenue - distribution costs" / revenue), at the upper end of the previous guidance range; adjusted operating expense expectations have been raised to $495-510 million, indicating that Circle is increasing its investments.

How to Interpret Circle's Latest Financial Report?

This financial report demonstrates Circle's strong position in the stablecoin field and the initial results of its diversification efforts. This growth is not a singular breakthrough but progress on multiple dimensions simultaneously, with increases in supply, revenue, profit, and market share.

The "Other Revenue" category, although small in its base, has shown astonishing growth. The growth in subscription services and transaction revenue suggests that Circle is attempting to break away from a "single-interest reliance," with early signs of revenue diversification emerging.

Equally noteworthy is that this year marks a key milestone in the Circle ecosystem. The launch of the Arc public chain testnet and the scaled expansion of the Payment Network (CPN) reflect Circle's significant transformation—from a mere stablecoin issuer to gradually evolving into a platform company providing comprehensive financial infrastructure. The steady growth in USDC's scale has laid the foundation for this evolution, while the development of the Arc ecosystem and CPN payment network has opened up even greater possibilities for the future. Coupled with the compliance dividend following the enactment of the U.S. "GENIUS Act," the entry of traditional financial institutions is becoming the new engine driving USDC's circulation growth.

However, this financial report also exposes the potential challenges that Circle must confront in its development.

Despite the rapid growth in "Other Revenue," the proportion of reserve interest income to total revenue still remains close to 96%. The company's income is highly dependent on interest income generated from USDC reserve assets. This single revenue structure makes it highly sensitive to interest rate environments. If market interest rates enter a downward cycle in the future, the growth of reserve interest income will come under direct pressure, subsequently affecting the overall profitability. Currently, "Other Revenue" accounts for less than 4%, and has not yet formed an independent profit pillar to support performance. The transformation towards revenue diversification still requires time.

A careful review of the financial report reveals that out of the $2.14 billion net profit in Q3, $61 million consists of a tax benefit (non-recurring) and $48 million is from the fair value decline gain on convertible debt (non-recurring), with these two items combined accounting for half of the net profit. Excluding these non-operating incomes, the actual operating profit would see a significant decline.

Furthermore, cost pressures are also diluting profits noticeably. Distribution, transaction, and other costs amounted to $4.48 billion, a 74% year-on-year increase, with costs growing faster than revenue. High costs directly squeeze profit margins. Although net profit has seen substantial growth, the improvement in profit margins needs to better match the revenue growth rate. From a business logic perspective, these costs are closely related to factors such as partner revenue sharing, making it difficult to quickly reduce them in the short term, thus becoming a key factor constraining profit realization.

At the same time, Arc is currently only in the testnet stage. Whether it can truly attract enough developers and users to drive the formation of an active ecosystem still needs time to validate.

Overall, this financial report showcases the typical features of a rapidly growing enterprise: a mix of opportunities and challenges, impressive short-term results, with long-term success depending on strategic execution and risk management capabilities. With the acceleration of the integration between crypto assets and traditional finance, along with the ongoing global demand for digital dollars, Circle's story is just beginning.

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Over the past 24 hours, the crypto market has shown strong momentum across multiple dimensions. The mainstream discussion has focused on Coinbase's official entry into the prediction market through the acquisition of The Clearing Company, as well as the intense controversy within the AAVE community regarding token incentives and governance rights.

In terms of ecosystem development, Solana has introduced the innovative Kora fee layer aimed at reducing user transaction costs; meanwhile, the Perp DEX competition has intensified, with the showdown between Hyperliquid and Lighter sparking widespread community discussion on the future of decentralized derivatives.

I. Mainstream Topics

1. Coinbase Acquires The Clearing Company, Officially Entering Prediction Market

This week, Coinbase announced the acquisition of The Clearing Company, marking another significant move to deepen its presence in this field after last week's announcement of launching a prediction market on its platform.

The Clearing Company's founder, Toni Gemayel, and the team will join Coinbase to jointly drive the development of the prediction market business.

Coinbase's Product Lead, Shan Aggarwal, stated that the growth of the prediction market is still in its early stages and predicts that 2026 will be the breakout year for this field.

The community has reacted positively to this, generally believing that Coinbase's entry will bring significant traffic and compliance advantages to the prediction market. However, this has also sparked discussions about the industry's competitive landscape.

Jai Bhavnani, Founder of Rivalry, commented that for startups, if their product model proves to be successful, industry giants like Coinbase have ample reason to replicate it.

This serves as a reminder to all entrepreneurs in the crypto space that they must build significant moats to withstand competition pressure from these giants.

2. Kalshi Launches Kalshi Research and Integrates BSC Network

Regulated prediction market platform Kalshi launched its research arm, Kalshi Research, this week, aimed at opening its internal data to the academic community and researchers to facilitate exploration of prediction market-related topics.

Its inaugural research report highlights Kalshi's outperformance in predicting inflation compared to Wall Street's traditional models. Kalshi co-founder Luana Lopes Lara commented that the power of prediction markets lies in the valuable data they generate, and it is now time to better utilize this data.

Meanwhile, Kalshi announced its support for the BNB Chain (BSC), allowing users to deposit and withdraw BNB and USDT via the BSC network.

This move is seen as a significant step for Kalshi to open its platform to a broader crypto user base, aiming to unlock access to the world's largest prediction market. Furthermore, Kalshi also revealed plans to host the first Prediction Market Summit in 2026 to further drive industry engagement and development.

3. AAVE Token Incentive Controversy Persists as Founders and Whales Increase Holdings Against the Market Trend

The AAVE community recently engaged in heated debates around an Aave Improvement Proposal (AIP) titled "AAVE Tokenomics Alignment Phase One - Ownership Governance," aiming to transfer ownership and control of the Aave brand from Aave Labs to Aave DAO.

Aave founder Stani Kulechov publicly stated his intention to vote against the proposal, believing it oversimplifies the complex legal and operational structure, potentially slowing down the development process of core products like Aave V4.

The community's reaction was polarized. Some criticized Stani for adopting a "double standard" in governance and questioned whether his team had siphoned off protocol revenue, while others supported his cautious stance, arguing that significant governance changes require more thorough discussion.

This controversy highlights the tension between the ideal of DAO governance in DeFi projects and the actual power held by core development teams.

Despite governance disputes putting pressure on the AAVE token price, on-chain data shows that Stani Kulechov himself has purchased millions of dollars' worth of AAVE in the past few hours.

Simultaneously, a whale address, 0xDDC4, which had been quiet for 6 months, once again spent 500 ETH (approximately $1.53 million) to purchase 9,629 AAVE tokens. Data indicates that this whale has accumulated nearly 40,000 AAVE over the past year but is currently in an unrealized loss position.

The founder and whale's increased holdings during market volatility were interpreted by some investors as a confidence signal in AAVE's long-term value.

4. Top Articles: DeFi Curators and Ethereum Annual Summary

In this week's top article, Morpho Labs' "Curator Explained" detailed the role of "curators" in DeFi.

The article likened curators to asset managers in traditional finance, who design, deploy, and manage on-chain vaults, providing users with a one-click diversified investment portfolio.

Unlike traditional fund managers, DeFi curators execute strategies automatically through non-custodial smart contracts, allowing users to maintain full control of their assets. The article offered a new perspective on the specialization and risk management in the DeFi space.

Another widely circulated article, "Ethereum 2025: From Experiment to Global Infrastructure," provided a comprehensive summary of Ethereum's development over the past year. The article noted that 2025 is a crucial year for Ethereum's transition from an experimental project to global financial infrastructure. Through the Pectra and Fusaka hard forks, Ethereum achieved significant reductions in account abstraction and transaction costs.

Furthermore, the SEC's clarification of Ethereum's "non-securities" nature and the launch of tokenized funds on the Ethereum mainnet by traditional financial giants like JPMorgan marked Ethereum's gaining recognition from mainstream institutions. The article suggested that whether it is the continued growth of DeFi, the thriving L2 ecosystem, or the integration with the AI field, Ethereum's vision as the "world computer" is gradually becoming a reality.

II. Mainstream Ecosystem Updates

1. Solana: Launches Kora Fee Layer and propAMM Data Research

The Solana Foundation engineering team released a fee layer solution called Kora this week.

Kora is a fee relayer and signatory node designed to provide the Solana ecosystem with a more flexible transaction fee payment method. Through Kora, users will be able to achieve gas-free transactions or choose to pay network fees using any stablecoin or SPL token. This innovation is seen as an important step in lowering the barrier of entry for new users and improving Solana network's availability.

Additionally, a deep research report on propAMM (proactive market maker) sparked community interest. The report's data analysis of propAMMs on Solana like HumidiFi indicated that Solana has achieved, or even surpassed, the level of transaction execution quality in traditional finance (TradFi) markets.

For example, on the SOL-USDC trading pair, HumidiFi is able to provide a highly competitive spread for large trades (0.4-1.6 bps), which is already better than the trading slippage of some mid-cap stocks in traditional markets.

Research suggests that propAMM is making the vision of the "Internet Capital Market" a reality, with Solana emerging as the prime venue for all of this to happen.

2. Perp DEX: Hyperliquid vs. Lighter Competition Intensifies

The competition in the perpetual contract DEX (Perp DEX) space is becoming increasingly heated.

In its latest official article, Hyperliquid has positioned its emerging competitor, Lighter, alongside centralized exchanges like Binance, referring to it as a platform utilizing a centralized sequencer. Hyperliquid emphasizes its transparency advantage of being "fully on-chain, operated by a validator network, and with no hidden state."

The community widely interprets this as Hyperliquid declaring "war" on Lighter. The technical differences between the two platforms have also become a focal point of discussion: Hyperliquid focuses on ultimate on-chain transparency, while Lighter emphasizes achieving "verifiable execution" through zero-knowledge proofs to provide users with a Central Limit Order Book (CLOB)-like trading experience.

This battle over the future direction of decentralized derivatives exchanges is expected to peak in 2026.

Meanwhile, discussions about Lighter's trading fees have surfaced. Some users have pointed out that Lighter charged as much as 81 basis points (0.81%) for a $2 million USD/JPY forex trade, far exceeding the near-zero spreads of traditional forex brokers.

Some argue that Lighter does not follow a B-book model that bets against market makers, instead anchoring its prices to the TradFi market, and the high fees may be related to the current liquidity or market maker balance incentives. Providing a more competitive spread for real-world assets (RWA) in the highly volatile crypto market is a key issue Lighter will need to address in the future.

The Secret Centralization Landscape of Stablecoin Payments: 85% of Transaction Volume Controlled by Top 1000 Wallets

Stablecoin payments have reached nearly half of total transaction volume, but are highly concentrated in a few institutional wallets: the top 1000 addresses contributed to about 85% of the transfer volume. While P2P transactions are numerous, their share of the total amount is significantly low.