Feb 25 (Reuters) - Circle reported an increase in fourth-quarter revenue on Wednesday, as its income from reserves got a boost from a rise in circulation of its stablecoin token, USDC.
The digital token is seeing a surge in adoption as favorable regulations such as the GENIUS Act, which was signed into law by U.S. President Donald Trump last year, establish a federal framework for dollar-pegged stablecoins.
Regulators around the world have also stepped up frameworks to oversee these digital assets,
paving the way for their broader adoption and benefiting issuers such as Circle.
USDC is a token pegged to the U.S. dollar, backed by reserves of cash and other low-risk assets such as U.S. treasuries that tether its market price close to the benchmark of $1.
Circulation of USDC rose 72% from a year earlier to $75.3 billion in the fourth quarter, lifting total revenue from reserves to $733 million.
The firm earns revenue by investing the cash received for its issued tokens in low-risk assets such as U.S. treasuries and deposits and pocketing the yield.
During the quarter, Circle also received preliminary approval to establish a national trust bank charter, a major move that could further integrate digital assets into the banking system.
Circle's fourth-quarter adjusted earnings before interest, taxes, depreciation and amortization came in at $167 million, an increase of 412% from a year earlier.
(Reporting by Utkarsh Shetti in Bengaluru Editing by Anil D'Silva)
