Circle Internet Group, Inc. Investor update

Good morning, good afternoon, good evening, wherever you are tuning in from. Welcome to this Circle Earnings AMA. I am really thrilled to have this time to answer questions and engage with everyone out there about Circle, our strategy, what we are trying to execute. We obviously just came off of our Q2 earnings, shared a lot, but now want to have an opportunity to open up and have more questions from the broader audience of folks that are interested in Circle. I am going to kick in and please, as we go, try and submit questions. We are trying to pull in as many as we can as we go through this.

First question from Lu Fei, "As Circle expands across payments, Arc, capital markets, and financial infrastructure, what gives you the greatest confidence in the team's ability to execute, and what capability do you most need to strengthen?" This is a great question, and I think as a CEO and really our whole board as well, but as a CEO specifically, I am always trying to think about the team, how we are executing, what needs to evolve from where we are. I would really speak to a few things here. I think the first is I do believe that Circle is executing really well, just overall. First, I would just say, since our IPO, our product velocity, the ability for us to launch and bring new products, new capabilities to market, has been pretty tremendous.

I think that builds on years of very strong cross-functional processes to bring these financial infrastructure and sometimes regulated financial products, but also platform infrastructure products into the market. One thing I would say about the team is that, while we have continued to grow, our growth has been slow and steady. We have not done explosive growth, adding huge numbers of people. We have really tried to calibrate that growth and make sure that we have got really good institutional depth within the business. So the leaders across the pillars of the business and across key domains of the business have been with us, and so there is, again, that institutional cohesion that is there. Now, another thing I would like to speak about here in this is we, like a lot of other companies, have really begun to deeply harness AI and agentic infrastructure.

That is really started in our software engineering, but it is now expanding across the organization. I think this is a very unique moment. What I say to the team members of the company is, "This is one of the greatest opportunities you will ever have in your career because you are being given new amplification, new superpowers." In order to harness this, it really is an opportunity for us to deepen what I would broadly call interdisciplinary and cross-functional skills. The individuals that know how to orchestrate and work with both humans and agents across domains are going to be the most effective. We are seeing that, again, in terms of the velocity of what we can bring into the market.

I would also note that Circle, both by my heritage as an internet software platform developer, that's really what I've done for about 30 years, but also more broadly, the product and engineering leadership, a lot of the leadership in the company comes out of really the leading technology companies in the world. We are a technology company. We think of ourselves as a technology company. The problem space that we're in is about, fundamentally, it's about technical innovation. Our velocity of technical innovation is increasing, and that's really critical. In terms of areas to strengthen, there are always areas to strengthen. I think as we take on a bigger and bigger role as a financial market infrastructure that the world's leading companies, the world's leading financial institutions depend on, that requires new skills.

I think all of us everywhere are faced with the challenges of cyber risk. That is very much a rapidly changing dimension, and we're seeing that obviously play out in crypto, but in many other areas. Strengthening in that area is key. Then for Circle as well, we started with the strategy of obviously building our home base, and then expanding into hub financial market centers with our infrastructure and our liquidity and operations. Now we're seeing tremendous opportunities to grow in dozens of other emerging markets and other countries around the world. A key capability that we're building is the ability to expand on the ground with people and operations and infrastructure to reach into the markets where we see enormous demand for Arc, for CPN, for USDC, stablecoins, other digital assets that we have.

Those are some of the things that we're focused on. Great question. Next question from ViralFacts3122, "Which real-world financial problem do you think stablecoins are closest to solving at scale?" I think we think about this a ton, obviously. I think one of the things that I often say is stablecoin money is sort of general purpose, general architecture, digital money. It literally today, if you look at the spectrum of use cases that we're seeing today at the very one end of the spectrum, we have AI agents paying other AI agents fractions of a cent to do some cognitive labor using inference and/or working with data and providing that back. That's at the very micro end of the scale and something that was never possible before with the financial system.

At the other end, we have large capital markets firms that are using stablecoins and USDC as working capital and collateral for traditional derivatives infrastructure. We have large global corporations that are now using Circle's products and stablecoins to do global treasury management, internal money movement, and many other things. But I think to get to the heart of the question, which is what's being solved now, what's being solved at scale? We very clearly have seen sort of product market fit for stablecoins in several places. One, obviously, stablecoins are 24/7, 365 globally available, reliable digital dollars, and that works really well where you have 24/7, 365 globally available markets. That obviously started with digital asset markets. As working capital, as collateral, as cash, as settlement, and payments in digital asset markets, tremendous product market fit. Now that is a real-world need.

One of the key points that we talked about in the earnings call is that digital asset markets themselves are transforming into not just trading things like Bitcoin or trading these kind of quote, unquote, "crypto assets." It is trading all assets. It is trading real-world assets. We are seeing this shift where the power of 24/7 markets, the power of digital tokenization, the power of globally available software-enabled markets, is coming into traditional markets. Trading equities or trading commodities plays a real-world economic function. It is price discovery. It is obviously capital invested that supports companies and their operations that informs the equity value of those businesses. That convergence is there. That is nascent, but that is there.

We are also seeing, I think all around the world, and we have talked about this, in emerging markets and in global markets, the demand for digital dollars in the form of things like USDC is growing as a store of value, as essentially a dollar banking substitute where SMEs, households, and even some large enterprises are basically moving to use stablecoins as an alternative to their own local banking systems. That is really supporting commerce, it is supporting savings and investment, and it is supporting cross-border payments. We see that today. We think that that is a problem that actually is being solved at scale when you think about the many hundreds of millions of users that are engaging with stablecoins globally. There is a big cross-section there. We think that that obviously can be a lot bigger.

Another area, obviously, we are seeing it in our own product line adoption, is in cross-border settlements. It is international payments and cross-border settlements where stablecoins can be used as the settlement leg. Increasingly, stablecoins are not just used as the settlement leg, they are actually used as the destination money as well. So pay-ins and payouts, store of value, but cross-border in nature. Obviously we see that today with CPN, and we see that more generally. Lots of cross-border firms, cross-border fintechs, and banks that do work in cross-border are working with us to integrate USDC into their cross-border settlements capabilities. Large payment networks themselves, like Visa, Mastercard, doing cross-border settlements where you have got issuers in one market able to settle very quickly. Those are some of the things that we are seeing.

I think just on the horizon, agentic, we believe, is going to be an enormous category of activity. Really, stablecoins and programmable money and machine-intermediated financial infrastructure is purpose-built for this world of agentic. We see, obviously, this penetration of stablecoins into traditional financial markets, this convergence of TradFi and on-chain continuing to happen and drive things. Ultimately, obviously, we believe that stablecoins will solve retail payment acceptance in some very powerful novel ways with materially improved unit economics for merchants and with new utility for consumers themselves in areas like affinity rewards, and the like. That piece, I think, will come over the next couple of years, but we believe ultimately, this form of money will be a superior form of money for merchant acceptance. But we are not there yet. That is not at scale. That is a great question. Thank you. Okay, question number 3.

FascinatingWatch594, "Where do you see the biggest opportunity for USDC in global payments?" This is a little bit of what we just talked about. I'll just maybe keep this a little bit shorter. Cross-border settlements, Capital markets payments and settlements, obviously agentic payments. I would say one other thing here, which is AI agents exist sort of in the cloud, as it were. They exist on the internet, and they're quite deterministic in terms of how they look to solve problems. My own belief is that, and we're seeing this already today in the numbers, where 99 point x percent of all agentic payments that are happening over these agentic payment protocols are happening with USDC, is that AI agents are focused on reliable money, a unit of account that's widely accepted, fast, extremely inexpensive settlement, and deterministic in nature.

We think it's very, very valuable there. I think we touched on broadly, the retail payments concept. I think right now what we're seeing with stablecoin payments is essentially this sort of stablecoin cards phenomenon, where basically there are traditional, there are newer, really, neo-banking products that are built on stablecoins. You have a digital wallet, you have stablecoins. You can make and receive stablecoin transactions. You can take your stablecoins, stake them in DeFi. You can use them to invest in digital assets, real-world assets, and other things. But you can actually take those stablecoins and use them as the balance to spend at traditional merchants through card networks. We've seen the charts. We work with a lot of the companies, in fact, almost all the companies in that arena, and are seeing this really strong growth there.