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Reuters
4 minutes ago
- Reuters
Stablecoin issuer Circle tops revenue estimate in first quarterly result since IPO
Aug 12 (Reuters) - Stablecoin giant Circle (CRCL.N), opens new tab surpassed expectations for second-quarter revenue in its maiden quarterly results since going public, sending its shares up 5% on Tuesday. Higher circulation of its USDC stablecoin and stronger subscription services helped the New York-based company cement a rally that has pushed its stock to more than five times its initial public offering price. Stablecoins, which are digital tokens backed by low-risk assets such as the U.S. dollar or Treasuries, have drawn increasing investor attention, especially since the Genius Act was passed last month. The momentum has helped companies such as Circle, which issues USDC - the second-biggest stablecoin by market value after Tether. After "our IPO and the Genius Act, we're seeing an acceleration of interest, with major institutions all leaning in," Chief Financial Officer Jeremy Fox-Geen said in an interview. USDC in circulation grew 90% as of June 30, compared to a year earlier. Circle expects it to grow at a compounded annual rate of 40% through the years. The token was also being used for cross-border transactions, including remittances both between individuals and businesses, CEO Jeremy Allaire said. The company's revenue and reserve income grew 53% year-over-year to $658 million, thanks to a jump in the interest it earns from the cash and short-term investments backing its USDC stablecoins. Revenue from subscription and services also rose, Circle said. Analysts were expecting revenues of $644.7 million, according to estimates compiled by LSEG. The company's net loss was $482 million, primarily due to two non-cash charges related to its IPO, including costs for employee stock awards that vested when the company went public and a higher valuation of its convertible debt following a rise in its share price. Circle on Tuesday also said it will roll out Arc, a public blockchain designed specifically for stablecoin transactions, this fall as it pushes to build the technological infrastructure for digital payments. "They're really trying to become the pillar of stablecoins in the U.S.," said David Bartosiak, stock strategist at Zacks Investment Research. "Circle can use what they have already done to establish themselves as a trusted mover." However, the company was currently not looking to strike many deals, even as the massive jump in its stock price has given it the ability to do so, CEO Allaire said. "We're careful and deliberate. I don't think our strategy here is to go try and do big, complex acquisitions to throw additional business lines."
Reuters
6 minutes ago
- Reuters
Fed's policy rate should stay on hold for now, Schmid says
Aug 12 (Reuters) - The U.S. central bank should not take tariffs' muted effect on inflation so far as an opportunity to cut interest rates, but rather as a sign that monetary policy is "appropriately calibrated," Kansas City Federal Reserve President Jeffrey Schmid said on Tuesday, in remarks that contrast with the increasingly dovish tone of some of his colleagues. "With the economy still showing momentum, growing business optimism, and inflation still stuck above our objective, retaining a modestly restrictive monetary policy stance remains appropriate for the time being," Schmid said in remarks prepared for delivery to an economic development conference in Oklahoma. "While increased tariffs seem to be having a limited effect on inflation, I view this as a rationale for keeping policy on hold rather than an opportunity to ease the stance of policy." Schmid said his "patient approach" to changing the policy rate, currently in the 4.25%-4.50% range, shouldn't be seen as a "wait and see" approach because he does not think that it will be clear in the next few months whether tariffs are pushing up on prices temporarily or persistently. Rather, he said, he feels the current policy rate is not very far above the neutral rate, where activity is neither stimulated nor restrained, and the labor market is still looking solid despite a sharp drop in job growth in recent months. And while the cooling labor market is keeping a lid on the pass-through of tariffs into inflation, boosting demand aggressively could raise the risk of an outsized increase in price pressures, Schmid said. "In my view, and in discussion with my contacts, growth remains solid, inflation remains too high, and therefore policy should remain modestly restrictive," he said. "That said, as I stated earlier, inflation is determined by the balance of supply and demand, and if I see indications that demand growth is weakening significantly, I will adjust my views accordingly."
Reuters
6 minutes ago
- Reuters
Daimler, Volvo, other truckmakers sue California to block emissions rules
Aug 12 (Reuters) - Four major truckmakers, including Daimler ( opens new tab and Volvo, sued California to block the state from enforcing strict emissions standards that U.S. President Donald Trump declared void in June. Daimler, Volvo, Paccar (PCAR.O), opens new tab, and International Motors ( opens new tab, formerly Navistar, said they have been "caught in the crossfire" after Trump reversed waivers issued during the Biden administration that let California set its own standards. In a complaint filed on Monday, the truckmakers said Trump's rescinding U.S. Environmental Protection Agency approval of California's plan to boost zero-emission heavy-duty truck sales and reduce nitrogen oxide emissions preempted the state's enforcement. They said this included enforcing the Clean Truck Partnership, a 2023 program giving the truckmaking industry flexibility to meet emissions requirements while advancing California's goal of lowering emissions. The truckmakers said the regulatory uncertainty has caused irreparable harm because they cannot plan production in advance without knowing which vehicles they will be permitted to sell. Monday's complaint names the California Air Resources Board and Democratic Governor Gavin Newsom as defendants, and was filed in the federal court in Sacramento, the state's capital. Newsom's office and the board did not immediately respond on Tuesday to requests for comment. Trump's action was part of the Republicans' effort to curb California's power under the federal Clean Air Act to set tighter pollution limits than federal law requires, and Newsom's desire to promote electric vehicles as he fights climate change. California has received more than 100 waivers under the Clean Air Act since 1970. During his June signing of joint congressional resolutions, Trump also blocked California's effort to end sales of gasoline-only vehicles by 2035. The state is also suing to undo Trump's actions. The case is Daimler Truck North America LLC et al v. California Air Resources Board et al, U.S. District Court, Eastern District of California, No. 25-02255.
