[Weekend Money] Stablecoin Growth Runway Opens for Circle... Expanding Beyond USDC Into Payments and AI

USDC on-chain transaction value up 49%... market share expands to 79%
CPN payment volume surges 15.2-fold... new businesses to begin generating significant revenue in 2027

Circle Internet Group (CRCL), a leading company in the global stablecoin market, is rapidly expanding its business. As real-world use of USDC, its dollar-backed stablecoin and core revenue source, grows, the company is developing new growth engines, including a business-to-business payment network, blockchain infrastructure, and AI-powered automated payments. Analysts say it may be time to take another look at the potential of these new businesses, even as growth in its existing interest income business slows.

Circle's revenue in the third quarter of this year was $865 million, up 17% from the same period a year earlier. Adjusted EBITDA rose 85% to $317 million. Both figures also beat market expectations.

However, the top-line growth should not be taken at face value. It included $182 million in revenue from the presale of tokens for the Arc blockchain network. Excluding that revenue, sales would have been $683 million, down 8% from a year earlier, while adjusted EBITDA would have been $135 million, down 21%.

Slowing profitability in the existing business stemmed from a decline in the yield on the reserve assets backing USDC. The average amount of USDC in circulation in the third quarter increased 8% to $73.3 billion, but interest income fell 8% to $658 million as the yield on reserve assets declined by 0.61 percentage points.

Hong Jinhyun, a researcher at Samsung Securities, said, "The Federal Reserve's 25-basis-point rate hike in September could lead to an improvement in reserve asset yields and interest income in the fourth quarter compared with the previous quarter."

One key area to watch is the growing real-world use of USDC. The value of USDC transactions on-chain reached $13.9 trillion in the third quarter, up 49% from the same period a year earlier. This far outpaced the overall market's growth rate of 26%. USDC's share of transaction volume also rose to 79%, up 13 percentage points from a year earlier. This indicates that USDC is being used more widely for actual payments and remittances, rather than merely being issued as a coin.

Circle's business-to-business payment network, CPN, is also growing rapidly. Its annualized total payment volume (TPV) reached $41.3 billion in the third quarter, a 15.2-fold increase from a year earlier and a 2.8-fold increase from the previous quarter. The number of participating financial institutions also rose 4.4-fold from a year earlier to 205. Circle is accelerating the expansion of its global payment network, including by signing an agreement to acquire Singapore-based business-to-business payments provider Tazapay.

Samsung Securities expects new businesses to begin contributing meaningfully to results from 2027, as CPN has started generating fee revenue from some transactions.

The combination of AI and stablecoins presents another growth opportunity. Circle aims to build Agent Stack in the first quarter of 2027, enabling AI agents to search for services, enter into agreements, and then automatically pay with USDC. Currently, 99.6% of the related x402 payment volume is settled in USDC, and Circle has secured approximately 2,800 agent service endpoints.

Hong said, "As regulatory uncertainty surrounding stablecoins eases and their integration with corporate financial systems expands, the increased real-world use of USDC could lead to a larger amount in circulation." Analysts say Circle's next phase of growth is worth watching, as its business model, previously dependent on interest income from reserve assets, could diversify into payments, financial infrastructure, and AI-powered automated payments.

This content was produced with the assistance of AI translation services.