Circle's reserve income grows 5% while average USDC grows 25%
Total revenue and reserve income of $701m in the second quarter grew 7% year on year, short of the $712m CoinDesk says analysts expected, as a 66 basis point fall in the rate Circle earns on its reserves offset a quarter's growth in the coin's average supply.
What happened
Circle reported second-quarter results on 5 August. USDC in circulation was $73.3bn at the quarter end, 19% higher than a year earlier, and onchain transaction volume was $14.8tn, up 151%. Total revenue and reserve income was $701m, up 7%. Reserve income was $668m, and the release attributes its 5% rise to 'the 25% growth in average USDC in Circulation, partially offset by a 66 bps decline in the Reserve Return Rate'. Other revenue was $34m, up 41%. Distribution, transaction and other costs were $412m, up 1%. Net income from continuing operations was $48m, $530m higher than a year earlier, which the release attributes to the previous year's stock-based compensation at the initial public offering. Adjusted EBITDA was $143m, up 8%. 'Our quarterly financial results reflect the current rate environment and a crypto market that has slowed', said Jeremy Allaire, Circle's co-founder, chief executive and chairman.
Why it matters
Issuing a dollar token is an interest-rate business, and this quarter states the arithmetic plainly: the average amount of USDC outstanding grew by a quarter and the income earned on the reserves behind it grew by a twentieth. What sits between the two is the reserve return rate, down 66 basis points. Reserve income of $668m is nearly the whole of the $701m top line, so what Circle earns is decided less by how much of its coin the market holds than by what the reserves behind it pay. The cost of distribution did not follow the supply either: distribution, transaction and other costs of $412m were 1% higher than a year before, against the 25% rise in average circulation.
What is not settled
The release publishes no analyst estimate, so the miss is the reports' framing rather than the company's; CoinDesk puts the consensus revenue figure at $712m. The release's guidance table is published as an image and was not read here, so no forward figure is recorded. CoinDesk reported that the shares rose about 10% before falling 3% in premarket trading. The release names the ARC token only in its risk disclosures and gives no figure for the token sale that funded Arc. Whether the reserve return rate keeps falling is a question about policy rates rather than about USDC.
Institutions in this story
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Circle Internet Group, Inc.
Issuer
Reported $701m of revenue and reserve income for the second quarter of 2026, of which $668m was reserve income, against $412m of distribution, transaction and other costs. USDC in circulation was $73.3bn at the quarter end and onchain transaction volume $14.8tn for the quarter.
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Standard Chartered PLC
Bank
Named in the release among new institutional uses of USDC, and one of three institutions Circle's chief executive said 'aren't piloting, they are expanding'. It is also a founding validator of Arc, announced the same day.
On the record
Circle's reserve income grows 5% as average USDC circulation grows 25%
Circle reported second-quarter 2026 revenue and reserve income of $701m on 5 August, up 7% year on year, with reserve income of $668m up 5% as a 66 basis point fall in the reserve return rate offset 25% growth in average USDC in circulation. USDC in circulation was $73.3bn at the quarter end and net income from continuing operations $48m.