Circle released its Q1 2026 results on May 11, 2026, showing sharp growth in USDC activity but weaker profitability. USDC supply rose 28% year over year to $77 billion, and on-chain volume jumped 263% to $21.5 trillion. Revenue increased 20%, yet net income dropped to $55 million, down 15% from a year earlier.
USDC circulation expanded and reserve income reached $653 million
According to the report, USDC in circulation reached $77 billion in the first quarter. Circle said the increase in demand was driven mainly by trading and payments activity. Average circulation was up 39% from the previous quarter, which helped lift reserve income. The company also pointed to higher usage of USDC for cross-chain transfers and broader growth in settlement activity across the crypto market.
Reserve income climbed to $653 million, up 17% year over year. Circle said lower reserve yields limited part of that gain. Institutional demand stayed strong during the quarter, while cross-border payments added to growth. The report described USDC as a major tool in digital dollar transactions as stablecoin usage continued to spread globally.
Exchange activity, payments, and DeFi pushed volume higher
Circle said on-chain transaction volume reached $21.5 trillion in Q1. The increase came from stronger activity across exchanges and apps. Higher market participation lifted trading volume, while payments and DeFi usage also added momentum. The company said institutions continued using stablecoins to complete settlements more quickly.
The report also noted rising interest in USDC services on fintech platforms. Market volatility supported heavier trading, and stablecoin trading pairs on exchanges saw higher volume. High-frequency trading and continued use of liquidity pools in DeFi protocols also contributed to the jump in on-chain figures.
Profit fell as operating expenses moved up
Even with revenue growth, Circle posted lower earnings. Net income fell 15% to $55 million. The report said operating expenses increased 76% from a year earlier, with much of the rise tied to stock-based compensation. Payroll costs also increased after the IPO. A separate figure in the source said operating expenses were up 32%, while infrastructure investments added to the company’s cost base and squeezed margins.
That left profitability under pressure despite the expansion in USDC usage. Circle still pointed to steady growth across exchanges and apps, with faster settlement and lower-cost transfers remaining part of the product case. The source also said reserves and regulation continue to shape stablecoin safety, and growth in usage does not remove market risk.
Arc token presale brought in $222 million at a $3 billion diluted valuation
Alongside the quarterly numbers, the source included another Circle update: the Arc token presale raised $222 million at a $3 billion fully diluted valuation. It said a16z led a $75 million investment. Participants named in the source included BlackRock company, Apollo, ICE, SBI, and ARK Invest.
Arc was described as a public blockchain built for institutions, focused on payments, contracts, and digital finance infrastructure. The source said the project is intended to go beyond stablecoin issuance. Total token supply was listed at 10 billion, with Circle holding 25% and around 60% allocated to ecosystem participants. The remaining share was set aside for long-term use.