Circle Wants to Own Crypto’s Financial Stack, but Tether Still Owns the Dollar

Circle is building a four-layer financial stack around Arc, its new blockchain. Tether still controls the digital dollar most of crypto actually uses.

Investors still see Circle as a stablecoin issuer. The numbers mostly agree. Reserve interest produced 94% of its first-quarter revenue.

Inside Circle’s Four-Layer Financial Stack

Circle calls Arc an economic operating system. It settles in under a second. Fees are paid in USDC, and privacy is optional and built in.

The layers stack like this. Assets such as USDC, EURC, and the yield-bearing USYC sit on the base chain. Developer products like wallets and the Cross-Chain Transfer Protocol (CCTP) come next. Circle’s own apps, including Mint and StableFX, sit on top.

Circle’s report says more than 100 firms joined the Arc testnet after its October 2025 launch. Goldman Sachs, Mastercard, and Visa are among the early partners. The testnet handled roughly 15 million transactions in the week ending July 15.

Big money 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 raise.

Why the rush? Reserve income of $653 million made up 94% of Circle’s $694 million first-quarter revenue. Other revenue doubled in a year yet reached just $42 million. The stack is Circle’s escape plan.

Circle’s final OCC approval for a national trust bank adds 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 near $184 billion. USDC holds $73 billion. It has slipped from $77 billion since the end of March.

Total Stablecoin Market Cap. Source: DefiLlama

The trading gap is wider still. USDT turned over roughly $48 billion in the past day. That is four times USDC’s total. Tron alone carries some $89 billion in dollar-pegged stablecoins, DefiLlama data shows. That single chain outweighs USDC’s entire supply.

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 remember.

Tether also moves fast when Washington calls. It froze Iran-linked USDT worth $131 million within hours of new US sanctions this month. Circle, meanwhile, faces a Wisconsin criminal complaint for refusing to recover a scam victim’s funds without a court order.

Circle has one strong counter. USDC handled 63% of stablecoin transaction volume in the first quarter, per Visa Onchain Analytics figures in its results.

The stock market is not sold yet. Circle shares have collapsed roughly 76% from their post-IPO peak. A split market may be forming.

The GENIUS Act, America’s 2025 stablecoin law, steers regulated money to USDC. Offshore trading keeps USDT. Arc’s mainnet launch will test whether new rails can pull liquidity from a dollar Tether still owns.

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