Circle, the NYSE-listed issuer of USDC, disclosed the presale alongside its first-quarter results. The company sold 740 million ARC tokens for its new Arc blockchain network at $0.30 each, implying a $3 billion fully diluted valuation for the project. Investors in the round include a16z Crypto ($75 million), BlackRock, Apollo Funds, ARK Invest, Intercontinental Exchange (the parent company of NYSE), Standard Chartered Ventures, the Philippines-based crypto wallet Coins.ph, Bullish, Haun Ventures, General Catalyst, Marshall Wace, IDG Capital, Janus Henderson Investors, and SBI Group, among others. Bullish, one of the presale participants, is the parent company of CoinDesk, a primary source for several factual claims in this article.

According to reporting by Digital Today and The Block, the presale is the first token presale conducted by a publicly listed U.S. company.

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Rate Pressure, Meet a Second Revenue Engine

Circle's core business depends on income generated by the U.S. Treasury reserves that back every USDC in circulation. When interest rates fall, that income shrinks. The regulatory framework shapes this dynamic directly: the GENIUS Act, signed into law on July 18, 2025, established the federal framework governing stablecoin issuers and, among other provisions, prohibits USDC holders from earning yield directly on their holdings. That structure concentrates Circle's revenue in reserve income and amplifies the company's sensitivity to rate movements.

Q1 2026 results illustrate the tension clearly. Total revenue reached $694 million, up 20% year over year, and adjusted EBITDA rose 24% to $151 million. Reserve income, the dominant revenue line at $653 million, grew 17% year over year. But net income dropped 15% to $55 million as that growth rate slowed. Earnings per share came in at $0.21, ahead of the $0.17 analyst estimate, but the direction of the net income line drew attention.

Chhugani's argument is that ARC presale proceeds, combined with surging USDC transaction volumes, diversify Circle's earnings away from rate sensitivity.

USDC in circulation hit $77 billion at quarter-end, up 28% year over year. On-chain transaction volume reached $21.5 trillion for the quarter, a 263% increase from the same period in 2025. USDC now accounts for 63% of total stablecoin transaction volume by market share, according to Circle's own figures.

Separately, Circle's Payments Network (CPN) processed an annualized $8.3 billion in volume by the end of Q1, climbing to approximately $10 billion by May 7 across roughly 55 participating institutions.

Clear Street analyst Owen Lau described Arc as "a second growth engine" for Circle, drawing comparisons to how Ethereum and Solana built revenue-generating ecosystems around their Layer-1 infrastructure. Mizuho's Dan Dolev highlighted Arc and CPN as evidence of "new use cases for stablecoins" extending well beyond the dollar-peg model, while William Blair's Andrew Jeffrey characterized Circle as holding a "volatile but significant stablecoin commerce advantage."

Arc is designed specifically for institutional stablecoin finance, targeting capital markets, tokenized real-world assets, and cross-border settlement. Its core technical features include sub-second finality (transactions become irreversible in under one second), configurable privacy controls, and a validator set structured to meet institutional compliance requirements. USDC serves as Arc's native gas currency, meaning transaction fees are denominated in dollars rather than a volatile token. The network's public testnet launched in October 2025 with participants including Visa, BlackRock, and HSBC. Notably, both Visa and BlackRock participate in the Arc testnet and are also investors in the ARC presale, a combination that signals institutional commitment extending beyond financial exposure alone. General launch is targeted for summer 2026.

Tokens sold in the presale carry multi-year lockups, and investors hold repayment rights if Arc fails to hit defined milestones. Not everyone is convinced the $3 billion valuation is justified at this stage. Ed Engel of Compass Point urged caution, warning against assigning significant value to Arc before "meaningful transaction activity" emerges and pointing to a history of elevated token valuations declining after launch.

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Why This Matters Outside the United States

For payments infrastructure, the stakes are highest in markets where the traditional banking system is expensive to access and dollar availability is constrained for businesses and individuals.

According to the BVNK 2026 Stablecoin Utility Report, 79% of crypto-active users in Africa hold stablecoins, compared with roughly 60% in other emerging markets and approximately 45% in high-income countries, making the continent the global leader in stablecoin adoption by share. Sub-Saharan Africa received more than $205 billion in on-chain value between July 2024 and June 2025, a 52% increase year over year, with stablecoins accounting for 43% of that activity.

Nigeria alone ranks first globally in combined stablecoin ownership: 48% of crypto-active users hold USDC and 59% hold USDT, the highest combined ownership rate recorded globally. Over 75% of current stablecoin users in the country plan to increase their holdings this year.

Traditional bank transfers to the region cost an average of 8.78% of transaction value in Q1 2025. Stablecoin transfers run between 0.5% and 1%.

Chris Maurice, CEO of African crypto infrastructure firm Yellow Card, described a major African food producer that "could only secure about 30% of their necessary dollars through the banking system" before turning to stablecoins for import payments.

Arc's institutional settlement layer, combined with CPN Managed Payments (launched April 8, 2026), addresses this gap. CPN Managed Payments allows banks and payment service providers to settle in USDC without directly holding digital assets, a meaningful feature in jurisdictions where crypto custody is tightly restricted or prohibited.

Standard Chartered Ventures, one of the ARC presale investors, operates one of the deepest institutional banking networks across Sub-Saharan Africa and South Asia. Its participation may signal that the strategic ambitions behind Arc's investor base extend well beyond the U.S. market.

The South Asia dimension adds further context. India has emerged as a significant stablecoin adoption market, with 30% USDC ownership and 27% USDT ownership among crypto-active users, despite active opposition to stablecoins from the Reserve Bank of India. The RBI and India's Finance Ministry remain publicly divided on stablecoin regulation, creating an uncertain but potentially large opportunity. Across South Asia more broadly, crypto inflows reached $300 billion in the most recent annual period, an 80% year-over-year increase. SBI Group, the Japanese banking conglomerate with an extensive Asia-Pacific footprint, is among the ARC presale investors, a detail analysts have noted as a potential indicator of Arc's regional ambitions. The Philippines-based wallet Coins.ph, another presale participant, already provides a live proxy for Arc's retail stablecoin use-case in emerging Asia.

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What Comes Next

CRCL shares rose approximately 15% on May 11 to close at $131.76, the stock's highest close since March 18. The shares are up roughly 66% year to date, giving the company a market cap of approximately $35 billion. Bernstein's $190 target implies another 44% upside from the May 11 closing price. When Bernstein first published the target in March 2026 at a lower share price, the implied upside at that time was approximately 60%.

Citigroup's Peter Christiansen carries a $243 target, while the 12-analyst consensus sits at approximately $138.50.

The forward picture depends on two variables moving in opposite directions. USDC volume growth and CPN expansion are accelerating. Reserve income, Circle's largest revenue line by far, faces continued structural pressure as long as rates stay low. On the regulatory front, the pending CLARITY Act in the U.S. Senate represents an unresolved variable; its passage or failure will help define the legal perimeter for digital asset markets and could affect institutional demand for Arc's infrastructure. Arc mainnet, scheduled for summer 2026, will be the next concrete test of whether institutional adoption follows the presale capital, or whether the caution from Engel proves warranted.