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Circle Tops Profit Estimates as Stablecoin Circulation Surges

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Circle (CRCL.N) reported stronger-than-expected third-quarter profits on Wednesday, driven by surging adoption of its flagship USDC stablecoin and higher reserve income amid expanding global use of digital dollars.

The company said USDC’s circulation more than doubled from a year earlier to $73.7 billion, as stablecoins — digital tokens backed by safe assets such as U.S. Treasuries — continue to gain traction with traditional financial institutions and regulators worldwide.

Circle earned an adjusted 36 cents per share, easily beating analysts’ expectations of 22 cents, according to LSEG data. Total revenue and reserve income rose 76% year-on-year to $739.8 million, surpassing forecasts of $700.5 million.

The gains come as the Trump administration’s Genius Act, introduced earlier this year, set the first clear legal framework for U.S. dollar-backed stablecoins, positioning the United States to become a leader in regulated digital payments.

Despite the upbeat earnings, Circle’s stock fell about 3% premarket after it raised its full-year operating expenses forecast to between $495 million and $510 million, citing new investments in platform growth and rising payroll taxes.

The company also faces the prospect of lower reserve income if interest rates decline, prompting efforts to diversify revenue streams through innovation. Earlier this year, Circle launched Arc, a new public blockchain designed to handle stablecoin transactions and support cross-border payments, merchant services, and DeFi integrations.

Bank of England Eases Stablecoin Rules, Allowing Investment in Government Debt

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The Bank of England (BoE) has proposed a more flexible regulatory framework for stablecoins, allowing issuers to invest up to 60% of their backing assets in government debt, a move that marks a softer stance toward the rapidly growing digital asset sector.

The proposal, part of a package of rules expected to take effect next year, represents a shift from the BoE’s earlier, stricter approach, which required stablecoin issuers to hold all their reserves in non-interest-bearing central bank accounts — a move that critics said would have stifled the industry’s development in the UK.

The new plan reduces that requirement to 40%, allowing the remaining portion to be invested in interest-bearing assets such as short-term government securities.

“Today’s proposals mark a pivotal step towards implementing the UK’s stablecoin regime next year,” said Sarah Breeden, the BoE’s deputy governor for financial stability. “We’ve listened carefully to feedback and amended our proposals for achieving this, including on how stablecoin issuers interact with the Bank of England.”

The central bank confirmed it will supervise only those stablecoins intended for widespread payment use, while non-systemic tokens — those primarily used for crypto trading — will fall under the Financial Conduct Authority (FCA).

However, the BoE maintained its plan to cap holdings at £20,000 ($26,842) for individuals and £10 million for businesses, though large firms such as supermarkets or exchanges could apply for exemptions. The bank said these limits would be temporary, designed to mitigate potential financial stability risks.

In a further step, the BoE is also considering providing liquidity facilities to systemic stablecoin issuers during times of market stress.

Crypto industry figures welcomed the more balanced approach but urged further relaxation. Tom Duff Gordon, vice president of international policy at Coinbase, said the BoE “could have allowed up to 80% of assets to be invested in government bonds” and called for “clearer timelines” on when the caps would be lifted.

The consultation period for the proposals runs until February 10, 2026.

Canada Hits Crypto Firm Xeltox with Record C$176.9 Million Fine for Money Laundering

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Canada’s anti-money laundering watchdog FINTRAC has imposed a record C$176.9 million ($126 million) penalty on Xeltox Enterprises Limited, citing the company’s failure to report suspicious transactions linked to child sexual abuse material, fraud, ransomware, and sanctions evasion.

The fine marks the largest enforcement action in FINTRAC’s history, underscoring Ottawa’s growing crackdown on financial crime in the crypto industry.

Xeltox, also known as Cryptomus and previously operating as Certa Payments Limited, is registered as a money services business in British Columbia. The company could not be reached for comment.

“Given that numerous violations in this case were connected to trafficking in child sexual abuse material, fraud, ransomware payments and sanctions evasion, FINTRAC was compelled to take this unprecedented enforcement action,” the agency said in a statement.

FINTRAC said Xeltox repeatedly failed to submit suspicious transaction reports when there were reasonable grounds to suspect links to criminal activity. The firm also did not report receipts of over C$10,000 in virtual currency as required under Canadian law.

The announcement comes amid a broader national push to combat money laundering. Earlier this week, the federal government unveiled plans for a new agency focused on fraud prevention, anti-money laundering efforts, and asset recovery.

Canada will also undergo an audit by the Financial Action Task Force (FATF) next month, a key global body assessing compliance with international standards on financial crime.

Just last month, FINTRAC issued a C$19.6 million penalty against Peken Global Limited, operator of the KuCoin crypto exchange, which had been the largest fine until now. KuCoin has appealed, calling the sanction “excessive and punitive.”

The new penalty against Xeltox signals that Canadian regulators are escalating their enforcement stance, targeting crypto intermediaries that fail to meet anti-money laundering and counter-terrorism financing obligations.