Circle shares have dropped from above $260 in June last year to $62 on July 19, a fall of about 76%, as the market rethinks how stablecoin issuers should be priced.
Speaking to Fox Business, Circle President Heath Tarbert did not dodge the stock move. He said that if the company executes on long-term plans such as Arc, the share price will take care of itself, adding that “Circle is playing a long game.” The market, though, has been less forgiving.
Mizuho cuts CRCL and lowers price target
Mizuho downgraded CRCL to “underperform” from “neutral” and slashed its price target to $50 from $85, implying downside of about 21%. Its argument was straightforward: even if rates remain high through 2027, margin pressure from lower pricing and tougher competition could still weigh on profits.
Retail traders are still talking up the stock on Stocktwits, where discussion remains active. But sentiment and valuation are no longer moving together.
Open USD and Visa put Circle’s lead to the test
Tarbert’s confidence is backed by scale. USDC has about $73 billion in circulation and runs across 34 chains. He has also argued that alliance-based competition in stablecoins is difficult to sustain over the long term.
That claim is now being tested. A new stablecoin, Open USD, has emerged with support from around 140 companies. Its model is simple: attract partners by returning reserve income. In practice, that means trying to work around Circle’s network effects by using revenue sharing to win merchants and financial institutions.
Visa has moved as well. The payments giant, which the report says has access to about 15,000 financial institutions and more than 200 million merchants worldwide, has launched the Visa Stablecoin Platform. The platform initially supports Open USD and remains compatible with USDC and Paxos’s USDG.
Circle’s moat has not disappeared. What has changed is the burden of proof. The issue for the market is no longer whether Circle has competitors, but how long it can keep its lead as Open USD and Visa build traction together.
Circle expands into merchant payments with JCB
Circle is also pushing into real-world payments. The company has signed a memorandum of understanding with Japan’s JCB to explore the use of USDC in merchant payments and cross-border treasury management. That includes a plan to let overseas visitors use stablecoins for in-person payments in Japan.
The move extends Circle’s focus from on-chain circulation to offline spending use cases and offers one of the clearest examples so far of the long-term strategy Tarbert has been highlighting.
USDT faces a two-year compliance window
If Circle’s problem is competition, Tether’s challenge is regulation.
According to the report, once the GENIUS Act has been in force for one year, USDT will have roughly a two-year adjustment window. The law requires stablecoin issuers to maintain full reserves, with those reserves held mainly in highly liquid assets such as cash and U.S. Treasuries.
Tether’s latest reserve disclosure, however, still includes precious metals, lending assets and Bitcoin. Whether those holdings will count under the new rules remains unclear.
Two years is not necessarily a long time for an issuer with an established reserve structure. Any portfolio shift would affect both its earnings model and its risk exposure. If USDT still has not reshaped its reserves into a compliant structure by the end of that period, it could lose access to trading on U.S. crypto platforms.
Hong Kong license race moves toward launch
Hong Kong is moving faster. Market sources cited in the report say Anchorpoint Financial Technology, led by Standard Chartered Bank (Hong Kong), was among the first batch of institutions to receive a stablecoin issuer license from the Hong Kong Monetary Authority in April this year. Standard Chartered and Anchorpoint could jointly announce the launch of a Hong Kong dollar-pegged stablecoin, HKDAP, before the end of this month.
The significance of that license goes beyond compliance. The bigger question is whether Standard Chartered’s global clearing network and commercial banking relationships can turn HKDAP from a licensed product into a working capital channel.
The next test will be whether a Hong Kong dollar stablecoin can be integrated into the daily flow of cross-border trade settlement and corporate treasury management. In that sense, the market is shifting from a race to secure licenses to a race to convert those licenses into actual money flows.
Stablecoin competition is entering a new phase
Circle still has scale, but it is dealing with traffic and partner pressure from the combination of Open USD and Visa. Tether still has the largest circulation base in the market, but it may need to complete a significant reserve restructuring within two years. Standard Chartered and Anchorpoint now have a license, though the real test has yet to come.
The 76% drop in Circle’s share price does not point only to fiercer stablecoin competition. The report also notes that rate expectations and softer sentiment across the broader crypto market are part of the picture. One point stands out: as stablecoins move from a winner-takes-most setup to a more contested field, the premium investors are willing to pay for scale is being recalculated.