Circle Stock Takes The Fight To Visa And MasterCard With New Arc Blockchain

Circle Internet Group (NYSE:CRCL) has seen a fair bit of volatility of late. The stock fell about 13% over the last five trading days to roughly $125 per share. That’s a sharp pullback, but it’s worth remembering Circle listed at $31 during its blockbuster IPO in June and is still up roughly  4x since. The recent decline comes as investors worry about potentially lower interest rates ahead. Fed Chair Jerome Powell hinted last Friday that a cut could be coming in September. Most futuristic stocks tend to celebrate that kind of news, but Circle is in a slightly different spot. Roughly 95% of its revenue last quarter came from interest on the cash and bonds backing its stable coins. So what’s the outlook like for Circle as the interest rate cycle likely turns?

USDC Is Core of Circle’s Business

Circle is best known as the issuer of USDC, the dollar-pegged stablecoin that runs on blockchains like Ethereum and Tron. The token is widely used across crypto trading, payments, and decentralized finance. The business is growing fast. Over the most recent quarter, revenues rose 53% year-over-year to $658 million, although IPO-related charges pushed Circle into a net loss. The real standout metric was USDC circulation, which jumped 90% from a year ago to $61.3 billion. Circle expects the circulation to compound at about 40% annually over the long run. And it’s not just trading volume that’s driving growth – USDC is also increasingly being used in cross-border payments and remittances by both individuals and businesses.

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The U.S. has made significant progress toward regulatory clarity for stablecoins with the passage of the GENIUS Act in July 2025, which establishes the first federal regulatory framework for payment stablecoins. That could open the door to mainstream adoption, especially as large companies outside crypto explore stablecoins for remittances, B2B transactions, and e-commerce. That said, it still trails behind Tether’s USDT, which dominates with about 67% of the dollar-backed stablecoin market versus USDC’s 26%, per CryptoQuant. For the upside case, see Circle Stock To $300?

Big Bet on Arc Blockchain

Now Circle wants to go a step further. The company recently unveiled Arc, a new public blockchain built specifically for stablecoin payments. The move puts Circle in direct competition with payments giants like Visa (NYSE: V) and Mastercard (NYSE:MA), as well as the crypto networks it already relies on such as Ethereum and Solana. The shift is notable, as Circle would not just issue digital currency but also run the system that facilitates transactions and potentially collects fees.

USDC will continue to exist on public blockchains, but Arc represents a push to own the rails of the payments ecosystem. The challenge, however, is adoption. A network only works if enough players use it, and several others are building their own systems. Circle will need to prove that Arc is worth building on.  Can Visa And Mastercard Survive The Stablecoin Revolution?

Circle Risks

There are other challenges, too. Circle’s non-interest revenues are also expected to soften in the second half of the year. Add in the interest rate factor, and the near-term growth of Circle’s core revenue stream looks vulnerable if conditions shift.  Moreover, stablecoin demand is also tied to broader crypto cycles. Usage tends to rise during bull markets, when trading activity spikes, and fades during downturns. To illustrate just how volatile the crypto sector can be, let’s look at crypto trading bellwether Coinbase (NASDAQ:COIN).

While COIN stock touched all-time highs of over $340 per share in late 2021, a few months after its IPO, it plunged to levels of around $30 by early 2023 – a roughly 90% collapse. The sell-off was driven by a broader unwinding of the crypto market. Coinbase has indicated that the crypto prices are subject to multi-year cycles, which is typically two to four years. And unlike Circle, Coinbase posted $3.6 billion in profit on $7.4 billion in revenue in 2021. Circle has yet to prove it can scale to these levels. Circle’s revenue stood at $1.89 billion for the fiscal year ended March 2025, with profits coming in at about $172 million.  A deep downturn in crypto markets or weaker interest income could push the stock down further. Could Circle fall to $20?

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