Circle’s Rapid Stablecoin Growth Faces Challenges from Profit Margins and Regulatory Uncertainty

Circle Internet Group (CRCL) posted strong financial results for the third quarter of 2025, fueled by increasing demand for its

stablecoin and notable progress in blockchain technology. The company’s combined revenue and reserve earnings climbed to $740 million, marking a 66% rise compared to the previous year, while net income surged by 202% to $214 million, according to an . USDC’s supply in circulation reached $73.7 billion by the end of the quarter, up 108% year-over-year, as highlighted in a , reinforcing its leading position in the stablecoin sector, now representing 29% of the market, based on the .

The earnings release also spotlighted Circle’s consideration of launching a native token on its Arc Network, a layer-1 blockchain tailored for stablecoin operations, as outlined in a

. The proposed token is intended to boost network engagement and align stakeholder incentives, while making use of Arc’s capabilities like stablecoin-powered gas fees and near-instant transaction finality, according to the . The Arc Network is currently undergoing public testnet trials, with participation from over 100 organizations, including Brex, Visa, and Deutsche Börse, as reported in the .

Circle’s growth initiatives also reached beyond blockchain. The company revealed a collaboration with Visa to test direct USDC payments for international workers, focusing on emerging markets with limited access to traditional banking, as mentioned in a

. This project supports Circle’s broader ambition to build a “global Economic OS,” as CEO Jeremy Allaire emphasized, according to the . At the same time, the Payments Network (CPN) grew to include 29 financial institutions, with another 55 under review, as detailed in a .

On the financial front, Circle raised its outlook for 2025, forecasting “Other Revenue” between $90 and $100 million and an RLDC margin of about 38%, according to the . Nonetheless, the company still faces obstacles. Despite higher revenues, Circle posted a net loss of $482.1 million in the second quarter of 2025, mainly due to non-cash charges such as stock-based compensation and adjustments for convertible debt, as explained in an . The stock price, which has dropped 28.49% so far this month ahead of earnings, is under pressure following a recent public share offering that diluted existing shareholders, as noted in the .

Expert opinions are mixed. While institutional investors like Renaissance Capital have shown faith with a $6.79 million investment, as reported in the

, there are ongoing worries about regulatory risks and sensitivity to interest rates. Circle’s heavy dependence on reserve income—which makes up more than 90% of its revenue—exposes it to changes in monetary policy, according to the . The company’s tokenized money market fund, USYC, has grown 200% since June 2025, reaching $1 billion, as stated in the , but expanding its sources of income remains a key goal.

With the stablecoin industry rapidly changing, Circle’s strategic moves around Arc and USDC will be pivotal. The development of its native token and progress in the testnet phase could help attract more institutional players, but the company’s future will depend on how well it balances innovation with sustainable profits in 2025 and the years ahead.