Circle secures federal trust charter as Q1 revenue climbs 20%

The US Office of the Comptroller of the Currency has approved Circle’s application to establish the Circle National Trust, a federally regulated trust bank. This regulatory milestone permits the company to directly custody USDC reserves under federal oversight, removing its reliance on third-party custodians. Following the announcement, Circle’s shares rose approximately 5% on Friday, as investors welcomed the prospect of enhanced transparency and institutional confidence.

The approval represents one of the most significant developments for the company since it became a public entity. By operating a federally regulated trust bank, Circle aims to strengthen its position in the stablecoin market and attract banks, payment providers, and large enterprises seeking compliant digital payment solutions. Chief Executive Officer Jeremy Allaire described the approval as a defining moment that brings blockchain-based financial infrastructure closer to the traditional banking system.

Coinciding with the regulatory news, the company reported first-quarter 2026 financial results showing robust top-line growth. Revenue increased 20% year-on-year to approximately $694 million, driven primarily by higher reserve income from USDC and continued expansion across its services business. Adjusted EBITDA also rose 24% to roughly $151 million, reflecting healthy operating momentum despite higher distribution costs and increased operating expenses.

However, the bottom line faced pressure from these expanding costs and stock-based compensation. Net income declined to $55 million from $65 million a year earlier, with adjusted earnings per share of approximately $0.21 falling slightly below Wall Street expectations. The company finished the quarter with approximately $1.5 billion in cash and equivalents, maintaining a solid balance sheet as it continues to invest in future growth initiatives.

Beyond its core stablecoin business, Circle is advancing its broader digital infrastructure strategy. The company recently raised approximately $222 million through a token presale for its Arc blockchain network, ahead of a mainnet launch later this year. Additionally, Circle signed a memorandum of understanding with Nomura to explore blockchain-powered payments, settlements, and collateral management using USDC, while also securing regulatory approvals in markets such as Singapore and the UAE.

Wall Street analysts have adjusted their views on the stock in light of these developments. The consensus rating remains a "Moderate Buy," with an average 12-month price target of $135. H.C. Wainwright and Needham raised their price targets to $150, while Aletheia Capital cited a target near $160. Morgan Stanley maintained an "Equal-Weight" rating with a $106 target, noting the company's expanding product portfolio and banking ambitions.

Despite the positive catalyst, CRCL stock remains down 66% over the past year and has underperformed the broader market. The OCC approval is viewed as a long-term structural improvement rather than an immediate turnaround, with analysts focusing on the company's ability to leverage its new banking charter for sustained institutional adoption.