Circle's Arc Network Gains Momentum: Is It the Next Growth Catalyst?

Circle Internet Group (CRCL) is taking the next big step in building its financial technology platform with the launch of the Arc Network. In the third quarter of 2025, Circle started the public testnet for Arc, which already has more than 100 major partners testing it, including AWS, BlackRock, HSBC, Mastercard, Standard Chartered and Visa.

The Arc Network is built to work as a base layer for internet finance. It aims to make payments and transactions faster, cheaper and more secure. Furthermore, the company plans to create a native token for the Arc Network to support its growth and help manage how the network operates. The company expects to launch the Arc Network commercially in 2026.

The Arc Network connects closely with Circle’s Payments Network (“CPN”), which is growing fast. CPN now has 29 financial institutions using it, and more than 500 are in the process of joining. The payment volume on CPN has grown about 100 times in just five months, showing early signs of strong demand.

If the Arc Network and CPN work together as planned, Circle could become one of the main players linking traditional finance with blockchain-based systems. However, the Arc Network is still in the testing phase. Circle needs to prove that it can scale the network and attract real-world usage. If Arc Network succeeds, it could play a key role in driving Circle’s next phase of growth while expanding the company's global payments business.

How Do Competitors Fare Against CRCL?

Circle faces stiff competition from the likes of PayPal (PYPL) and Coinbase Global (COIN) in the cryptocurrency space.

PayPal has launched Pay with Crypto, a service that lets U.S. merchants accept payments from more than 100 cryptocurrencies, with near-instant settlement and fees starting at 0.99%. PayPal says this can cut cross-border costs by up to 90% and gives merchants access to more than 650 million crypto users globally. It also connects crypto payments directly to PayPal USD and PayPal’s larger commerce tools. This shows PayPal is pushing hard to use stablecoins and digital assets in real-world payments.

Coinbase is positioning Base as the infrastructure for onchain commerce. Coinbase recently announced a partnership with Shopify to enable USD Coin (“USDC”) payments on Base for millions of merchants. Transactions on Base are fast, low-cost and global, and merchants can accept USDC with no extra setup or FX fees.

CRCL’s Share Price Performance, Valuation & Estimates

Circle shares have been down 15.8% since it started trading on the stock exchange on June 5, 2025, underperforming the Zacks Financial - Miscellaneous Services industry’s decline of 6.6%.

CRCL Price Return Performance

Circle is currently trading at a higher price-to-sales (P/S) multiple compared with the Zacks Financial - Miscellaneous Services industry. The stock’s forward 12-month P/S ratio sits at 5.21, higher than the industry’s forward 12-month P/S ratio of 2.94.

CRCL Forward 12-Month P/S Ratio

The Zacks Consensus Estimate for 2025 earnings is pegged at a loss of 87 cents per share, narrower than the loss of $1.94 per share, 30 days ago. The consensus mark for 2026 earnings has been revised upward by 21% to 92 cents over the past 60 days.

Circle currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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