Circle reported fourth-quarter revenue that surpassed Wall Street expectations, driven by increased income from its stablecoin reserves. The surge in circulation of its primary stablecoin, USDC, contributed significantly to this financial success.
USDC, a token pegged to the U.S. dollar and backed by cash and low-risk assets, is experiencing heightened adoption. This growth is supported by developing regulatory frameworks for dollar-pegged stablecoins in the U.S. and globally, which are fostering broader acceptance of these digital assets.
In the fourth quarter, USDC circulation climbed 72% year-over-year to $75.3 billion. This volume increase boosted total revenue from reserves to $733 million. Circle generates revenue by investing the capital received for its issued tokens in low-risk assets like U.S. treasuries and deposits, profiting from the yield.
Recent strategic partnerships, including one with Visa, enable U.S. institutions to settle transactions using USDC. The company also secured preliminary approval for a national trust bank charter, a development poised to further integrate digital assets within the traditional banking system.
Overall revenue and reserve income for the quarter rose 77% to $770 million, exceeding the average analyst estimate of $739 million. On-chain transaction volumes for USDC saw a substantial increase of 247%, reaching $11.9 trillion.