Circle’s $3B Arc Token Presale Puts It Against Coinbase

Circle announced a $222 million presale of ARC tokens on May 11 that values its planned Arc network at $3 billion on a fully diluted basis. The presale was led by a16z Crypto, which committed $75 million, and included institutional investors such as BlackRock, Apollo Funds, Intercontinental Exchange, SBI Group, Janus Henderson, Standard Chartered Ventures, General Catalyst, IDG Capital, Haun Ventures and Bullish.

The presale announcement came with Circle’s first-quarter results. The company reported $694 million in total revenue and reserve income, a 20% increase from a year earlier. USDC in circulation rose 28% to $77 billion, and on-chain transaction volume reached $21.5 trillion, a 263% year-over-year increase.

Circle presented Arc as a public blockchain aimed at institutional finance. The company plans Arc to be compatible with the Ethereum Virtual Machine, to support fee structures native to stablecoins, to offer deterministic sub-second finality, and to include configurable privacy for institutional audit needs. Circle has outlined the network as part of a broader stack that includes its Agent Stack and the Circle Payments Network.

Circle described ARC as a coordination token for validators, builders, liquidity providers, exchanges, institutions and users. Under Circle’s plan, USDC would remain the transactional asset while ARC would help govern network economic rules and align participants.

Analysts at Clear Street raised their price target on Circle’s stock from $152 to $157, citing Arc, the Agent Stack, the Circle Payments Network and regulatory progress as potential upside factors. Clear Street estimated the Circle Payments Network had reached about $8.3 billion in annualized total payment volume and approached $10 billion by early May.

Coinbase continues to report substantial engagement with USDC and its Base network. In its first-quarter materials, Coinbase reported that it held roughly 25% of USDC in circulation-about $19 billion on average across its products-and that Base processed 62% of global on-chain stablecoin transaction volume during the quarter. Coinbase also reported that more than 90% of on-chain agentic stablecoin transaction volume occurred on Base and that its x402 payments protocol processed more than 100 million payments, with over 99% completed using USDC.

The two firms are developing adjacent products that overlap. Coinbase has launched cbBTC, a wrapped-Bitcoin product used across decentralized finance. Circle is preparing cirBTC for integration with Arc and Circle Mint. Omar Kanji, an investor at Dragonfly, asked how long the “marriage” between Circle and Coinbase can remain clean as both firms pursue infrastructure that captures the same flows.

Tom Wan, head of data at Entropy Research, noted that business lines at Circle and Coinbase are converging across blockchain, tokenization, payments and stablecoins. He added that a formal split appeared unlikely given ongoing mutual benefits, but that overlap between the firms would increase friction over time.

Circle has framed Arc and related products as a way to broaden its business beyond income from assets backing USDC. The company has described the network and services layer as potential sources of revenue tied to transaction volume, developer adoption, institutional participation and infrastructure fees. The presale provides a market valuation linked to that strategy and the company’s stated roadmap for Arc.