Circle's USDC on-chain transaction volume hit $21.5 trillion in Q1 2026, up 263% year-over-year, but the stablecoin issuer's net income fell 15% to $55 million as operating expenses ballooned 76% to $242 million. The company also disclosed a $222 million ARC token presale for its upcoming Layer-1 blockchain, Arc, and launched a new toolkit for autonomous AI agents.
USDC on-chain volume hits $21.5T, but market share slips
USDC in circulation reached $77.0 billion as of Q1 2026, up 28% from a year earlier. The stablecoin captured 63% of all stablecoin transaction volumes in the quarter, according to Visa Onchain Analytics. But Circle's overall stablecoin market share slipped 62 basis points year-over-year to 28%. That's still a dominant slice, but the slide suggests rivals are eating into its lead.
Profit dips as operating costs surge
Net income from continuing operations dropped to $55 million from $65 million a year ago. Adjusted EBITDA still grew 24% to $151 million, and total revenue plus reserve income rose 20% to $694 million. Reserve income alone increased 17% to $653 million. The big drag: stock-based compensation jumped to $51.8 million in Q1 2026 — roughly four times the $12.7 million in Q1 2025. Operating expenses climbed 76%, driven by product, distribution, and infrastructure investments.
Circle unveils Arc token presale and Agent Stack
Circle disclosed a $222 million ARC token presale at a $3 billion fully diluted valuation for its Layer-1 blockchain, Arc. The network is meant to support USDC-native applications. Separately, the company launched Agent Stack, a toolkit that lets autonomous agents transact in USDC across chains and payment protocols. It's a bet on the AI-agent economy, and it's early.
USDC overtakes USDT in adjusted on-chain volume
For the first time, USDC surpassed Tether's USDT in adjusted on-chain volume during Q1 2026, according to Mizuho Financial Group research. Tether still dwarfs Circle on profit, reporting $1.04 billion in Q1 net profit and excess reserves of $8.23 billion, with a stablecoin supply of roughly $189 billion. Circle's smaller profit base and rising costs will be under scrutiny as it scales Arc and the USDC ecosystem.
