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Circle (CRCL) stock jumped 2% in afternoon trading on Tuesday after the stablecoin issuer posted better-than-expected quarterly revenue for the first time since going public.
The company reported second quarter total revenue of $658 million, versus the $647 million analysts expected.
CEO Jeremy Allaire said the company’s stablecoin, USDC (USDC-USD), was the “fastest-growing major stablecoin over the past year.”
USDC in circulation grew 90% year over year to $61.3 billion at quarter end and has grown an additional 6.4% to $65.2 billion as of Aug. 10.
“Overall activity globally in the digital asset economy has been growing,” Allaire told Yahoo Finance on Tuesday morning.
“We’re continuing to see growth in the use of dollar digital currencies like USDC as a store of value around the world in cross-border settlements,” he added. “Use cases continue to expand, and I think people are finding that this is an incredibly high utility, new form of money.”
The company also announced ARC, a new blockchain network for stablecoin finance that will launch in the second half of the year.
“We wanted to create a way for institutions to pay fees on blockchains in a fast, predictable manner that would be simple from an accounting perspective and could deliver very low-cost and stable fees,” Allaire said during the company’s earnings call on Tuesday morning.
The stock is up roughly 480% from its IPO price of $31 per share, as crypto-friendly legislation has lifted the sector.
Circle has been at the center of optimism over the stablecoin market following the passage of the GENIUS Act, legislation that creates guardrails and a framework for digital tokens backed by assets such as the US dollar.
Read more: Can you buy crypto with a credit card? See the pros and cons.
Circle makes much of its money from interest income, specifically from short-term Treasury bills backing its stablecoin, USDC.
The company’s reserve income increased 50% year over year to $634 million, primarily from an 86% growth in USDC stablecoin circulation.
Allaire indicated that if the Federal Reserve cuts interest rates and yields on short-term Treasurys decline, the growth of stablecoins will offset the decline in rates.
“We believe that lower interest rates are going to be accelerative to the business, as money velocity picks up, as invested capital picks up, and as more people are putting money to use in the economy, this very high utility form of money will grow,” Allaire said.
The company also shares part of its revenue with Coinbase (COIN), a major distribution partner.
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