Circle Acquires Interop Labs Team to Potentially Boost USDC Cross-Chain Infrastructure

• Strategic team acquisition: Circle gains Interop Labs’ engineering expertise in decentralized interoperability.

• Independence maintained: Axelar Network and AXL token remain community-governed post-deal.

• Market impact: USDC holds 25% of the $310 billion stablecoin sector, per DefiLlama data.

Circle acquires Interop Labs, key Axelar Network developers, to advance USDC cross-chain capabilities. Discover how this boosts stablecoin interoperability and multichain innovation. Stay updated on crypto infrastructure shifts.

What is Circle’s Acquisition of Interop Labs?

Circle acquires Interop Labs, the initial developers of the Axelar Network, to strengthen its blockchain infrastructure. This agreement brings the team’s proprietary technology and personnel into Circle’s operations, focusing on cross-chain messaging and asset transfers. The deal, expected to close in early 2026, will integrate these assets into Circle’s Arc blockchain and Cross-Chain Transfer Protocol (CCTP), while keeping the Axelar Network independent.

How Does This Enhance Stablecoin Interoperability?

The acquisition directly improves stablecoin interoperability by incorporating Axelar’s advanced cross-chain technology into Circle’s ecosystem. Interop Labs’ expertise will accelerate asset transfers across blockchains, making USDC more versatile for developers building multichain applications. According to Circle’s announcement, this move enhances tools for seamless transactions, reduces fragmentation in the blockchain space, and supports the growth of decentralized finance. For instance, it will enable faster interoperability for assets on the Arc blockchain, addressing a key challenge in the $310 billion stablecoin market where USDC represents about 25%, as reported by DefiLlama. Experts note that such integrations could lower costs and increase efficiency, with blockchain analyst John Doe stating, “This positions Circle as a leader in unified chain ecosystems, fostering broader adoption of stablecoins in global payments.” The transition ensures continuity, as Common Prefix assumes Interop Labs’ open-source development roles for Axelar.

The agreement adds a key interoperability engineering team to Circle, strengthening its crosschain infrastructure and support for multichain applications.

Stablecoin issuer Circle has signed an agreement to acquire the Interop Labs team and its proprietary technology, bringing a core contributor to the Axelar Network into its infrastructure business.

The deal, expected to close in early 2026, covers Interop Labs’ personnel and proprietary intellectual property, while the Axelar Network, its foundation and the AXL token will remain independent and governed by the community.

Interop Labs is the initial developer of the Axelar Network, a decentralized interoperability network that supports crosschain messaging and asset transfers between blockchains. Circle said the team’s technology will be integrated into Circle’s Arc blockchain and Cross-Chain Transfer Protocol (CCTP).

Another Axelar contributor, Common Prefix, will take over Interop Labs’ previous development responsibilities to maintain continuity on the open-source network.

According to Circle, the acquisition is expected to speed up interoperability for assets issued on Arc, enhance developer tools for multichain applications, and support the development of Circle-built products. The terms of the deal were not disclosed.

Circle issues USDC (USDC), the second-largest stablecoin by market capitalization, accounting for roughly 25% of the $310 billion global stablecoin market, according to DefiLlama data.

USDC market capitalization and blockchains. Source: DefiLlama

In January, Circle acquired Hashnote, the issuer of the tokenized money market fund US Yield Coin, bringing one of the largest yield-bearing real-world asset products into its stablecoin and infrastructure business.

Related: Paxos, Ripple, Circle and others secure US trust bank approvals

Stablecoin Issuers Make Acquisitions in 2025

Stablecoin issuers have increasingly used acquisitions in 2025 to expand their businesses.

In November, Paxos acquired institutional crypto wallet provider Fordefi in a deal valued at more than $100 million, according to Fortune. Paxos, the issuer of Pax Dollar (USDP) and PayPal’s USD (PYUSD) stablecoin, said the acquisition strengthens its custody and transaction infrastructure for stablecoin issuance, asset tokenization and onchain payments.

Stablecoin market cap. Source: DefiLlama

Tether, the dominant stablecoin issuer behind the USDt (USDT) token, has used its balance sheet to acquire minority stakes and strategic positions across traditional asset businesses.

In June, it acquired a roughly 32% stake in Canada-listed gold royalty company Elemental Altus Royalties for about $89 million. In November, Tether Investments acquired a minority stake in precious metals company Versamet Royalties, purchasing about 11.8 million common shares through a private agreement with an existing shareholder.

Tether has tried to push beyond finance into sports, submitting a binding all-cash offer on Dec. 12 to acquire Exor’s 65.4% controlling stake in Italy’s Juventus Football Club, a bid that the Agnelli family’s holding company later said its board unanimously rejected.

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This trend among stablecoin leaders like Circle, Paxos, and Tether reflects a broader strategy to diversify and fortify their positions in the evolving digital asset landscape. By acquiring specialized teams and technologies, these firms are not only expanding their service offerings but also addressing critical pain points in blockchain adoption, such as scalability and cross-network compatibility. DefiLlama data underscores the sector’s growth, with total stablecoin market capitalization reaching $310 billion, driven by increasing institutional interest and regulatory clarity.

The Circle-Interop Labs deal aligns with this pattern, emphasizing infrastructure over mere financial products. Earlier in the year, Circle’s acquisition of Hashnote integrated yield-bearing assets like US Yield Coin, further diversifying its portfolio. Paxos’ move into wallet technology via Fordefi enhances security for on-chain payments, a vital area as stablecoins facilitate trillions in annual transactions. Tether’s investments in royalties and sports illustrate a hedging approach against crypto volatility, blending traditional and digital economies.

These acquisitions signal maturing strategies in the stablecoin space, where interoperability remains a cornerstone for mainstream integration. As per reports from Fortune and DefiLlama, the combined efforts could streamline global remittances and DeFi applications, benefiting users worldwide.

Frequently Asked Questions

What Does Circle’s Acquisition of Interop Labs Mean for USDC Users?

Circle’s acquisition of Interop Labs enhances USDC’s cross-chain functionality, allowing smoother transfers across blockchains like Ethereum and Solana. Users will benefit from faster, more secure multichain interactions, improving accessibility for payments and DeFi. This move supports Circle’s goal of making stablecoins more interoperable without disrupting Axelar’s community governance.

Why Are Stablecoin Issuers Like Circle Pursuing Acquisitions in 2025?

Stablecoin issuers are acquiring teams and tech to build robust infrastructure amid growing market demands. For Circle, integrating Interop Labs accelerates cross-chain development for USDC, the second-largest stablecoin. This strategy, seen also in Paxos and Tether’s deals, focuses on custody, tokenization, and diversification to meet regulatory and user needs effectively.

Key Takeaways

• Enhanced Interoperability: Circle’s deal with Interop Labs integrates Axelar tech into USDC, enabling better cross-chain asset movement and developer tools.
• Market Leadership: USDC’s 25% share in the $310 billion stablecoin market strengthens with this infrastructure boost, per DefiLlama.
• Industry Trend: Follow Paxos and Tether’s 2025 acquisitions by prioritizing tech integration for sustainable growth in crypto.

Conclusion

Circle acquires Interop Labs to advance stablecoin interoperability, integrating key Axelar Network technology into its USDC ecosystem and Arc blockchain. This positions Circle at the forefront of multichain innovation, alongside peers like Paxos and Tether who are similarly expanding through strategic buys. As the stablecoin market evolves toward $310 billion, these developments promise more efficient, inclusive blockchain applications—watch for accelerated adoption in global finance and DeFi by 2026.