Circle Q2 Eases Bernstein Concerns on Competition, Reserve Income

Circle, issuer of the USDC stablecoin, earns most of its revenue from cash and short-term U.S. government securities held in reserve. That makes lower interest rates a direct threat to earnings, while Tether, new stablecoin consortia and yield-sharing deals intensify competition. Bernstein said Circle’s widening partnership network, regulatory lead and Arc blockchain strategy could broaden distribution and reduce the company’s dependence on reserve income.

Circle reported on Aug. 5 that second-quarter 2026 revenue and reserve income rose 7% from a year earlier to $701 million. Reserve income increased 5% to $668 million despite a 66-basis-point decline in the reserve return rate, while USDC circulation reached $73.3 billion, up 19%. Bernstein said the results countered bearish concerns, adding that regulatory approvals, partnerships with BlackRock and other institutions, and Arc’s Sept. 16 launch could generate revenue not yet reflected in estimates.