Circle · Japan · DAN (Do Anything Now) · CoinDesk
Mizuho confirms Circle bank approval doesn't solve USDC growth, stablecoin competition risks
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Circle Internet Group's (CRCL) final approval from the Office of the Comptroller of the Currency to establish First National Digital Currency Bank is a positive milestone, but investors may be overestimating its significance, according to Japanese investment bank Mizuho.
Key facts
- Circle's USDC stablecoin has faced headwinds in recent months, with its circulating supply falling by roughly $7 billion from its March peak to about $74 billion in July as redemptions outpaced new
- The analysts also highlighted increasing competitive pressure from Open USD, a newly launched, GENIUS Act-compliant dollar-backed stablecoin developed by a consortium of more than 140 financial
- Those challenges include a decline in USDC's market capitalization since March 2026, which the bank said raises questions about the stablecoin's growth trajectory
- Shares of the stablecoin issuer closed 5% higher on Friday following the news
Summary
Mizuho said Circle's final OCC approval for a national trust bank is a positive step but doesn't address the company's core challenges. The bank pointed to USDC's declining market capitalization since March as a key concern. The report also warned that Open USD, a new consortium-backed stablecoin, could accelerate competition and pressure Circle's business. "While a positive development, we believe the market reaction is likely overly optimistic, as this does not resolve fundamental issues that have been hurting the stock of recent," analysts led by Dan Dolev said in the Friday report.