Points of Focus

• ARK Invest says Circle is becoming far more than a USDC issuer.
• Lorenzo Valente described the company as building a four-layer financial operating system.
• The strategy aims to diversify revenue beyond reserve income as stablecoin competition intensifies.

Circle is transforming from a stablecoin issuer into a broader financial infrastructure company, according to ARK Invest’s director of digital assets research, Lorenzo Valente, who argues investors continue to underestimate how rapidly the company’s business model is evolving.

In a post on X, Valente said valuing Circle primarily as the issuer of USDC (USDC) is “the wrong mental model,” describing the company as building a four-layer financial operating system that stretches well beyond stablecoin issuance. The comments come as Circle expands its blockchain, developer services, and payments infrastructure following its public listing and recent strategic investments.

Circle is clearly becoming one of the most misunderstood companies in crypto.

Most people still value it as “the USDC issuer.” That is increasingly the wrong mental model. Circle is very far from the company it was 2-3 years ago.

Circle is building a four-layer financial…

— Lorenzo Valente (@LorenzoARK) July 21, 2026

The view reflects a broader debate over whether stablecoin issuers will remain narrow payment companies or evolve into full financial platforms that compete across multiple layers of onchain finance.

Circle is expanding across the financial technology stack

According to Valente, Circle’s strategy is built around four interconnected layers.

The foundation consists of Arc, Circle’s blockchain infrastructure, which combines sub-second settlement, USDC-denominated transaction fees, built-in foreign exchange functionality, and optional privacy features. Above that sits a digital asset layer, including products such as USDC, EURC, and the tokenized money market fund USYC.

The third layer consists of developer infrastructure, including wallets, smart accounts, and Circle’s Cross-Chain Transfer Protocol, while the top layer focuses on customer-facing applications such as Circle Mint and StableFX for payments, treasury management, and foreign exchange.

The architecture represents a shift from monetizing a single stablecoin toward generating revenue from infrastructure, software, and financial services built around digital dollars.

Reducing dependence on interest income

The strategy also addresses one of Circle’s biggest financial challenges. Reserve income generated from USDC backing assets continues to account for the overwhelming majority of the company’s revenue, leaving earnings highly sensitive to interest rate movements.

ARK has previously argued that long-term growth will increasingly depend on Circle expanding payment services, developer tools, and strategic infrastructure partnerships rather than relying primarily on Treasury yields.

The expansion comes as competition intensifies across the stablecoin market. Tether remains the dominant issuer by circulation, while banks, fintech companies, and payment networks are launching regulated dollar-backed tokens following the passage of US stablecoin legislation.

For Circle, the next phase may depend less on how many USDC tokens circulate and more on whether developers, financial institutions, and enterprises adopt the broader infrastructure built around them. If that ecosystem gains traction, the company could increasingly resemble a financial operating system rather than simply another stablecoin issuer.