Arc token sales: Circle's unexpected trump card in the game for USDC's future
Circle's recent Q2 report caught my attention not so much for the numbers as for the strategic maneuver they revealed. The company's management didn't just report stable performance but also significantly raised revenue and margin forecasts for 2026. On closer inspection, it becomes clear: the main catalyst for this optimism was a one-time sale of tokens from its own blockchain, Arc. This gives Circle a kind of "financial cushion" to weather the current downtrend in the crypto market and prepare for the next growth cycle.
Financial results: a bet on the future
The company's total revenue and reserve income amounted to $701 million, while adjusted EBITDA grew 8% year-over-year, reaching $143 million. However, the key update concerns the forecast: other revenue for 2026 was raised to $310–330 million from the previous $150–170 million. The expected revenue margin net of distribution costs (RLDC) was also revised upward—to 41.7–43.7% from 38–40%. This revision clearly points to stronger monetization beyond reserves and better operating leverage than previously assumed.
Arc: a new engine, but the fuel came from the token presale
Arc is Circle's own layer-1 blockchain, a settlement network for stablecoin finance where USDC serves as the native gas token. The company is moving up the technology stack: previously it issued tokens for other networks, now it operates its own infrastructure. This allows it to earn from blockchain space fees rather than just reserve income. The public mainnet launch of Arc is scheduled for September 16. Among the institutional validators are BlackRock and DTCC, giving the network real reach and clear use cases: tokenized securities, collateral operations, and settlements.
The immediate financial result came precisely from the token sale. Circle conducted a presale of Arc before the network launch, placing the native token among investors. Approximately $180 million of the raised forecast for other revenue comes specifically from this deal. Regular revenue from Arc—staking, transaction fees, and commercial services—will only appear after launch and will depend on network activity.
Risks on rates and distribution have softened
Circle's profit depends on three variables: the volume of USDC in circulation, the yield on reserve assets, and the share of that yield that remains after distribution costs. Reserve yield in Q2 was 3.48% and declined along with SOFR, but this source remains the foundation of the business. No significant rate cuts are expected in the near term, so reserve yield will hold. Distribution costs, which eat into part of this yield, have just passed their main test: the agreement with Coinbase was renewed on the same terms, and the scenario of the largest partner's share increasing has been taken off the table.
Management's forecast confirms resilience. Excluding revenue from the Arc token presale, the RLDC margin for the year is expected to be around 39%—in the middle of the previous 38–40% range. Reserve yield is holding, and the risk on distribution economics has eased, so further profit growth increasingly depends on the recovery of USDC volume in circulation.
Weak on-chain activity pressures USDC, but a cycle reversal will bring a strong rebound
Circle's long-term base case assumes USDC volume growing 40% per year. Currently, it is contracting. The investment debate boils down to a key question: will new use cases grow fast enough to offset the cyclical decline in on-chain activity.
USDC and USDT are increasingly performing different functions in the on-chain dollar market. USDT primarily works as a payment and transfer tool, while USDC is functionally closer to a trading, collateral, and settlement asset. This specialization makes USDC more sensitive to risk appetite within the industry. Prediction markets provide a second source of structural demand: Polymarket uses pUSD fully backed by USDC.
USDC is well-positioned ahead of the next recovery in activity. The bulk of the stablecoin's supply is concentrated in trading, collateral operations, and DeFi, so circulation is highly dependent on the cycle. Supply contracts when on-chain liquidity falls, but it can accelerate quickly when trading volumes, leverage, and capital return to the market. The Arc token sale gives Circle time to wait for that moment, and in my view, this is a smart strategic move that strengthens USDC's position ahead of a new growth phase.