USDC news

Open USD, a bank-backed stablecoin consortium involving over 140 companies including BlackRock, Coinbase, and Visa, poses the most credible threat yet to Circle's USDC, according to CoinShares. Its model distributes reserve income to partners rather than the issuer, potentially squeezing Circle's margins and raising USDC distribution costs. The stablecoin is expected to launch in the second half of 2026. CoinShares notes that while Open USD challenges USDC's economics, Circle retains advantages in liquidity and integrations. The report also highlights that the market may be overreacting, as Open USD has yet to launch and faces unresolved details.

Circle's 10-K filing reveals it incurred $1.4 billion in distribution costs linked to Coinbase in 2025, up from $924.5 million in 2024, representing 51% of its total revenue and reserve income. USDC circulation surged 72% year-over-year to $75.3 billion, while full-year revenue rose 64% to $2.7 billion, but Circle's margin held flat at 39%. Distribution and transaction costs consumed 63% of fourth-quarter reserve income. Alternative stablecoin models, such as Open USD and Hyperliquid's AQAv2 framework, are pressuring Circle by demanding a larger share of reserve income. JPMorgan flagged Hyperliquid as a near-term earnings headwind for Circle and Coinbase, with competition eroding retained value. Circle's collaboration agreement with Coinbase, set to expire in August 2026, may be renegotiated. Coinbase is also involved in Open USD, which shares reserve earnings. Circle's regulatory edge, having received OCC approval for a national trust bank, offers some protection, but if major platforms demand terms similar to Hyperliquid or Open USD, Circle's retained margin could shrink further.

Investment banks Mizuho and JPMorgan have turned bearish on Circle, downgrading the stock and cutting price targets amid mounting pressure on USDC's economics. Mizuho downgraded Circle to underperform and slashed its price target to $50 from $85, citing threats from the newly launched Open USD token. Open USD allows free minting and redemption, with partners retaining reserve earnings, potentially disrupting Circle's revenue model. JPMorgan also lowered estimates, flagging a revised revenue-sharing deal with Hyperliquid that could create a 'prisoner's dilemma' between Circle and Coinbase. CRCL has fallen over 20% this year, closing at $63.22.

Wall Street analysts are increasingly cautious on Circle as competition in the stablecoin market heats up. Mizuho downgraded Circle stock to Underperform and slashed its price target to $50, while JPMorgan lowered earnings estimates, both citing pressure on USDC's economics. The launch of Open USD, a pass-through stablecoin backed by major financial and crypto firms, threatens Circle's revenue-sharing model. Mizuho warned that distribution partners may demand more favorable terms, especially with Circle's Coinbase deal up for renewal and Coinbase also backing Open USD. JPMorgan highlighted Circle's revised partnership with Hyperliquid as evidence of distributors securing better economics, calling it a 'prisoner's dilemma' that pits Circle and Coinbase against each other. However, Bernstein and William Blair maintained bullish ratings, arguing that Open USD validates the stablecoin market and that Circle's advantages are hard to replicate.

The companies will explore using USDC for JCB's cross-border treasury operations and merchant payments in Japan as regulated stablecoin adoption gains momentum.

JPMorgan warned that Hyperliquid's new arrangement with Circle and Coinbase threatens the economics of Circle's USDC stablecoin, creating a 'prisoner's dilemma' that incentivizes competition over distribution at the expense of each other's revenue. Under the deal, Coinbase classifies USDC on Hyperliquid as 'on-platform,' paying 90% of reserve income to Hyperliquid, up from a roughly 50-50 split with Circle. JPMorgan estimates Hyperliquid holds $6 billion of USDC, about 8% of circulating supply. The bank lowered earnings forecasts for both Circle and Coinbase, citing the Hyperliquid changes and weaker crypto markets. USDC supply has fallen to $73 billion from $80 billion in March amid broader stablecoin market contraction and increased competition.

JCB, Japan's largest card network with 140 million users and 40 million merchants globally, has signed a memorandum of understanding with Circle to explore stablecoin payments using USDC. The partnership aims to enhance cross-border transactions, reduce remittance costs, and ease currency exchange for tourists, starting with a proof of concept for internal fund transfers. The initiative aligns with Japan's broader push for stablecoin adoption following regulatory changes. Other efforts include Lawson convenience stores piloting yen-denominated stablecoin payments from August, and Circle's planned partnership with Nomura to launch a USDC-based foreign exchange settlement service for Japanese businesses by 2027.

Circle's stock rose nearly 5% to $66.14 after US regulators approved its national trust bank, but the stock remains down about 20% year-to-date. A head-and-shoulders pattern and negative Chaikin Money Flow indicate continued bearish pressure. Stablecoin rivals like Open USD and Global Dollar are eroding USDC's market share, with USDG supply increasing 108% over six months while USDC market cap slipped 3.3%. Analysts, including Baird, have cut price targets, noting that a close below $64.37 could lead to a drop toward $40.

Circle (CRCL) shares surged 8.4% to $68.40 after the stablecoin issuer received final OCC approval to establish a national trust bank, transitioning its $73.2 billion USDC stablecoin to a unified federal framework. The milestone marks a shift from state-by-state regulation and comes amid a broader crypto-friendly stance under the Trump administration, which has also granted charters to Sony Bank, Ripple, BitGo, and others.

Circle, the issuer of the USDC stablecoin, has received final approval from the US Office of the Comptroller of the Currency (OCC) to establish First National Digital Currency Bank, a national trust bank operating as Circle National Trust. The approval, announced Friday, allows Circle to create a federally regulated trust institution for digital asset custody services. Initially, Circle National Trust will provide fiduciary custody services for Circle and its affiliates, with potential expansion to institutional customers such as banks and regulated derivatives firms. The trust bank could also eventually manage the USDC Reserve under federal oversight. CEO Jeremy Allaire called the approval a defining step for bringing blockchain into the US financial system. Circle has expanded its regulatory footprint globally, including a BitLicense in New York and compliance with the EU's MiCA framework. USDC's market cap stands at $73.3 billion, and Circle's stock rose 16% in pre-market trading following the announcement.