Nov 12 (Reuters) - Circle beat Wall Street

expectations for third-quarter profit on Wednesday, on the back

of higher reserve income through its flagship USDC as stablecoin

circulation increased.

Global adoption of stablecoins - digital tokens backed by

low-risk assets such as U.S. dollars or Treasuries - is gaining

momentum as traditional financial firms roll out new offerings

in the space and regulators worldwide move toward clearer rules.

The Trump administration, which pledged to position the

United States as a global leader in cryptocurrency, enacted the

Genius Act earlier this year, establishing a legal framework for

regulating dollar-backed stablecoins aimed at enhancing the

safety of digital payments.

Circle, which issues USDC, earns reserve income from

investing the fiat reserves that back the stablecoin.

The circulation of USDC - backed by the U.S. dollar - more

than doubled from a year earlier to $73.7 billion.

The stock fell 3% before the bell as Circle raised the

annual adjusted operating expenses forecast to $495 million to

$510 million, citing growing investment to build its platform

and higher payroll taxes.

The company is also looking to diversify its revenue streams

as rate cuts are expected to put pressure on its reserve income.

Earlier this year, Circle announced the roll out of Arc, a

public blockchain designed specifically for stablecoin

transactions, which would help the company tap into cross-border

settlements, merchant payments and decentralized finance

integrations.

On an adjusted basis, Circle earned 36 cents per share in

the reported quarter, beating analysts' expectations of 22 cents

according to data compiled by LSEG.

Circle's total revenue and reserve income surged 76% from a

year earlier to $739.8 million in the three months ended

September 30, topping estimates of $700.5 million.