Circle Wants AI Payments to Create an Entirely New Stablecoin Market

Circle’s latest earnings suggest USDC is beginning to separate from the crypto cycle just as autonomous software agents create a potentially new market for digital payments.

Circle Co-Founder, CEO and Chairman Jeremy Allaire said, “Our quarterly financial results reflect the current rate environment and a crypto market that has slowed — both are conditions outside our network. But near-term activity tells a different story. We received our federal trust bank charter; Arc is launching on public mainnet September 16th; we launched the Agent Stack to put programmable money at the center of the agentic economy; and the institutions using USDC today, like BlackRock, BNY, and Standard Chartered aren’t piloting, they are expanding.”

USDC’s share of the fiat-backed dollar stablecoin market ended the quarter at 27%, down 66 basis points year over year, even as circulation increased. The company also reported $83 billion of USDC minted and $87 billion redeemed, illustrating how fluid stablecoin balances can be.

USDC on-chain transaction volume reached $14.8 trillion during the quarter, up 151% year over year; while Circle’s total revenue and reserve income increased a comparatively modest 7% to $701 million. USDC circulation ended the period at $73.3 billion, up 19%.

But the central question facing investors is no longer whether USDC continues growing. It is whether Circle can successfully evolve before the economics of stablecoin issuance become commoditized.

Circle’s shares have swung sharply in recent weeks amid concerns that a consortium-backed rival stablecoin, Open USD, could pressure the economics underlying USDC. Wall Street remains divided over whether Circle’s competitive advantages can offset a business model that still derives most of its revenue from interest earned on reserves.

Circle is positioning USDC not simply as a digital dollar that generates interest income, but as the settlement asset inside a broader network of payments, tokenized assets, institutional liquidity and autonomous software. For now, however, Circle remains fundamentally a reserve-income business. The company generated $668 million of reserve income in the quarter, representing roughly 95% of total revenue and reserve income. Reserve income rose 5% from a year earlier as average USDC circulation increased 25%, partially offset by a 66-basis-point decline in the reserve return rate to 3.5%. Other revenue, which includes subscription and services revenue, rose 41% but remained comparatively small at $3.