Circle Internet Group has raised $222 million in the presale of Arc, the native token of its new blockchain, as the company looks to expand beyond its core business of issuing the USDC stablecoin, CNBC has learned.

Andreessen Horowitz served as the lead investor in the raise with a $75 million investment. Other investors include BlackRock, Apollo Funds, New York Stock Exchange parent Intercontinental Exchange, SBI Group, Janus Henderson Investors, Standard Chartered Ventures, General Catalyst, Marshall Wace, ARK Invest, IDG Capital, Haun Ventures and the crypto exchange and CoinDesk owner Bullish.

The raise gives Arc a fully diluted network valuation of $3 billion.

“[Blockchain] infrastructure is becoming as important as mobile operating systems or cloud platforms,” Circle CEO Jeremy Allaire told CNBC in an exclusive interview. “We want to build an operating system that has many, many stakeholders in it … major companies who are running the infrastructure with us and who ultimately help to govern it.”

“We’re becoming a broader internet platform company,” Allaire added. “We’re entering the operating system business and we’re doing it by building this multi-stakeholder distributed model with a token, with a distributed network. But it is an operating system business. And we’re also getting into the apps business.”

Arc is a public blockchain designed for institutional finance. Allaire emphasized it’s about more than stablecoins and payments — noting it can “run the actual economy.”

“The economy is not just representations of values, it’s every contract that undergirds those financial relationships … the systems of governance that we use to govern all these economic institutions,” Allaire said.

As a 25% stakeholder in Arc’s initial supply of 10 billion tokens, Circle can participate in operating validator infrastructure, generating new fee revenue and earning staking income. The majority of the tokens, 60%, will go to participants who build on, use and contribute to the Arc network. The remaining 15% will be allocated to a long-term reserve.

Investors should follow transactions, asset issuance and success on the network found by the developer community, Allaire said.

He added that the economy is becoming increasingly machine-operated, with AI agents handling more of the operational and contractual work currently managed by humans.

“We’re entering this era where software machines will power the economic system,” he said. “Software will do most of the work — that is what AI agents represent.”

The company also unveiled a set of services and tools designed to help developers build AI agents that can manage transactions, access online services and make payments using USDC.

Positioning for a more competitive market

Circle’s ambitions with Arc reflect the existential shift other crypto firms are facing: They need to evolve beyond the businesses that were built in crypto’s early days around the speculative cycles of cryptocurrencies, and toward more durable businesses with steadier and more diversified revenue.

“While USDC has become the trusted digital dollar for banks, corporations, and financial
institutions seeking the speed of crypto without its volatility, there remains a problem. The internet infrastructure which USDC runs on today wasn’t built with big institutions in mind. It was built for individuals and crypto enthusiasts. That’s where Arc comes in,” a16z crypto wrote in a blog post Monday morning.

If Arc is successful, it could allow Circle to own more of the infrastructure its flagship USDC stablecoin runs on. Today, USDC depends heavily on networks like Ethereum and Solana for settlement and distribution partners like Coinbase.

The initiative is as much about playing defense as it is about growth. While regulation supporting stablecoins legitimizes them – including the GENIUS Act signed into law last year and the STABLE Act, which is set to get an initial vote this week in the Senate Banking Committee – some investors worry banks and fintechs may launch their own competing dollar tokens, removing the need for a third-party issuer.

The on-chain capital raise

Circle is the first publicly listed company to conduct a token presale – an early sale of digital tokens before a blockchain project officially launches.

Crypto companies like token sales for their ability to raise large amounts of capital and build an early user community. They are frequently likened to IPOs since both represent public-facing fundraising mechanisms that result in a transferable financial interest.

Also known as “initial coin offerings,” or ICOs, token sales became notorious for their role in fueling the 2017 crypto peak – when the market grew so quickly that projects launched with little oversight, leading to some high-profile failures and scams.

The landscape has shifted significantly since then. Under the Trump administration’s more crypto-friendly regulatory posture, the Securities and Exchange Commission is increasingly focused on establishing frameworks for compliant tokenized securities and on-chain capital formation, creating conditions that could encourage the return of ICO-style fundraising in a more mature and sustainable structure.

“It is a major shift in how stakeholders can participate in the growth of networks,” Allaire said. “Every company in the world, over time, will be tokenized, meaning your shares will be tokens … [and] you will use digital tokens as mechanisms of engagement with your customers and stakeholders.”

The head of one of the nation’s largest auto finance lenders isn’t overly concerned about rising consumer automotive debt and inflated used car prices leading to longer loans on vehicle purchases.

His main reasoning? The percentage of income consumers are spending on their vehicles has remained relatively flat compared with 2019, before the coronavirus pandemic led to inflated pricing as demand surged but inventories stayed low.

“If I just told you, ‘Car prices going up, interest rates going up, insurance prices going up,’ you would say, ‘You know what, consumers must be paying more as a ratio to the income,'” Capital One Auto President Sanjiv Yajnik told CNBC. “However, if you look at every quintile of salary and earnings of people, the payment-to-income ratio has remained fairly flat.”

While Capital One reports median monthly car ownership payments have jumped from $390 to $525 since 2019, data provided exclusively to CNBC from its automotive unit suggest that vehicle costs have stayed relatively stable compared with income. That’s because, overall, the payment-to-income ratio has remained flat at approximately 10% since 2019, according to the automotive arm of the American bank.

Capital One Auto found 80% of car purchasers who finance a vehicle are below the generally recognized payment to income threshold of 15%.

“The consumer is being cautious. They’re being responsible. This is a much healthier way to do things than the alternative, because it’s not a discretionary spend,” said Yajnik, referring to consumers prioritizing vehicle payments for transportation, including work.

To get to that goal, however, more consumers are taking on longer loans to keep payments affordable.

The auto finance veteran’s view contrasts with others in the industry who view the longer term loans as a detriment to consumers’ pocketbooks.

They argue that so-called “forever loans” of six years or more have led to many buyers, particularly of new vehicles, being underwater on the equity of their cars and trucks. That means they owe more than their vehicle is worth when they decide to trade it in.

Edmunds reports roughly 26% of used vehicles purchased that involved a trade-in vehicle had negative equity this year through April. The amount of negative equity averaged $5,105, a 35% increase from 2019.

“As loan term lengths increase on average, the pace at which consumers make progress paying down their balance slows,” Jessica Caldwell, head of insights for CarMax‘s Edmunds, wrote in a recent online post. “If consumers then trade in their vehicle too soon for any reason, they are increasingly left holding more loan debt.”

Regarding financing for new vehicles during the first quarter, 90.2% of new vehicle loans involving trade-ins with negative equity carried terms of at least 72 months, and 43% extended to 84 months, according to Caldwell. The average negative equity trade-in was $7,183 during the quarter for new vehicles, according to Edmunds.

Those figures have been climbing since 2022, when inflated used vehicle values caused by a pandemic-fueled chip shortage insulated more shoppers from carrying debt into their next vehicle.

Consumers need to keep their vehicles for more time to make the long loans worth it, according to Yajnik. But that can also cause increases in maintenance costs as well as the likelihood that a vehicle needs repairs that exceed its value or has to be scrapped altogether.

“Yes, it takes longer to get your equity, but in the meantime, you get a use of the car, and you’re earning money,” said Yajnik, a 28-year veteran of Capital One who has led the automotive lending division since 2008.

The average listed price of a used vehicle was $25,390 in March, according to Cox’s most recent data. That compares to new vehicles, which depreciate faster, at $48,667.

Cox Automotive reports if all other things are equal on a loan, financing for a $30,000 vehicle at a 9% annual percentage rate would cost $3,100 more on an 84-month term than a 48-month loan. However, there’s a $264 difference in the monthly payments, which Yajnik said makes it more affordable for many consumers, especially those in lower income brackets.

“There’s obviously going to be pockets that have problems, but one has to start from a different place, which is, for which reason are people buying cars, and are they doing so irrationally?” Yajnik said.