Circle (CRCL) has revealed a net loss for the second quarter, even as its USDC stablecoin, the second-largest in the market, saw its circulation nearly double compared to the previous year. Furthermore, on-chain transaction volume exploded, increasing more than fivefold to reach $5.9 trillion.
The company also announced the development of a layer-1 blockchain. This new blockchain, named Arc, aims to offer a reliable, enterprise-level infrastructure for stablecoin transactions, foreign exchange (FX), and applications within capital markets. A public test network for Arc is expected to launch within the next few months.
Circle has stated that Arc will be compatible with the Ethereum Virtual Machine (EVM), and will employ USDC as its main token for gas fees. The new blockchain incorporates a built-in stablecoin foreign exchange engine. Sub-second settlement times, alongside optional privacy features, are also planned.
Circle isn’t the only player pursuing a stablecoin-centric blockchain. Plasma secured over $373 million through a heavily oversubscribed token offering. Stable, another project, targets Tether’s USDT, a stablecoin that competes with USDC in size. Payment processor Stripe is also reportedly developing Tempo, its own blockchain geared toward stablecoin payments.
In its inaugural quarterly report as a publicly traded entity, Circle mentioned that USDC’s share of the stablecoin market increased to 28%. Overall revenue and income from reserves grew by 53%, reaching $658 million, driven by increased USDC balances. However, the company reported a net loss of $482 million, largely attributed to expenses related to its June initial public offering (IPO). Earnings before interest, tax, depreciation, and amortization (EBITDA) increased 52% to $126 million, according to the company.
The stablecoin industry, valued at $270 billion, is experiencing heightened interest. The recent GENIUS Act, signed into law, is one reason for this. This legislation aims to strengthen the sector by forming a federal regulatory structure for payment stablecoins within the U.S.
Circle’s stock price has risen 6.35% to $171.41 in pre-market trading.