Circle Wants to Own Crypto’s Financial Stack, but Tether Still Owns the Dollar
Circle is constructing a four-layer monetary stack round Arc, its new blockchain. Tether nonetheless controls the digital greenback most of crypto really makes use of.
Investors nonetheless see Circle as a stablecoin issuer. The numbers largely agree. Reserve curiosity produced 94% of its first-quarter income.
Inside Circle’s Four-Layer Financial Stack
Circle calls Arc an financial working system. It settles in beneath a second. Fees are paid in USDC, and privateness is elective and inbuilt.
The layers stack like this. Assets akin to USDC, EURC, and the yield-bearing USYC sit on the base chain. Developer products like wallets and the Cross-Chain Transfer Protocol (CCTP) come subsequent. Circle’s personal apps, together with Mint and StableFX, sit on high.
Circle’s report says greater than 100 corporations joined the Arc testnet after its October 2025 launch. Goldman Sachs, Mastercard, and Visa are amongst the early companions. The testnet dealt with roughly 15 million transactions in the week ending July 15.
Big cash is following. Circle’s first-quarter results revealed a $222 million ARC token presale at a $3 billion valuation. BlackRock, a16z crypto, and ARK Invest joined the elevate.
Why the rush? Reserve earnings of $653 million made up 94% of Circle’s $694 million first-quarter income. Other income doubled in a 12 months but reached simply $42 million. The stack is Circle’s escape plan.
Circle’s final OCC approval for a nationwide belief financial institution provides regulatory muscle. The license comes from the Office of the Comptroller of the Currency.
Why Tether Still Owns Crypto’s Dollar
Tether’s USDT market cap stands close to $184 billion. USDC holds $73 billion. It has slipped from $77 billion since the finish of March.
The buying and selling hole is wider nonetheless. USDT turned over roughly $48 billion in the previous day. That is 4 occasions USDC’s whole. Tron alone carries some $89 billion in dollar-pegged stablecoins, DefiLlama data exhibits. That single chain outweighs USDC’s whole provide.
History explains the loyalty. USDC fell to $0.88 in March 2023. Some $3.3 billion of its reserves sat frozen at the collapsed Silicon Valley Bank. Traders keep in mind.
Tether additionally strikes quick when Washington calls. It froze Iran-linked USDT price $131 million inside hours of latest US sanctions this month. Circle, in the meantime, faces a Wisconsin criminal complaint for refusing to recuperate a rip-off sufferer’s funds with no court docket order.
Circle has one robust counter. USDC dealt with 63% of stablecoin transaction quantity in the first quarter, per Visa Onchain Analytics figures in its outcomes.
The inventory market just isn’t bought but. Circle shares have collapsed roughly 76% from their post-IPO peak. A break up market could also be forming.
The GENIUS Act, America’s 2025 stablecoin legislation, steers regulated cash to USDC. Offshore buying and selling retains USDT. Arc’s mainnet launch will check whether or not new rails can pull liquidity from a greenback Tether nonetheless owns.
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