Japanese investment bank Mizuho downgraded Circle (CRCL) to underperform from neutral and cut its price target from $85 to $50, arguing that OpenUSD’s business model threatens the long-term economics of the stablecoin issuer.
Circle shares were trading 0.6% lower at $62.63 at press time.
Open USD, a dollar-backed stablecoin introduced June 30 by the Open Standard consortium, “could fundamentally alter CRCL’s business model, which relies on retaining a large portion of treasury yield to drive revenue,” analysts led by Dan Dolev said in a Tuesday note to clients.
The consortium has more than 140 partners, including Mastercard (MA), Stripe, Coinbase (COIN), and BlackRock (BLK).
USDC has also lost momentum in recent months, with its circulating supply falling to around $73 billion from nearly $80 billion in March. The drop comes as the stablecoin market has shrunk by about $10 billion since May amid weaker cryptocurrency trading activity and growing competition from newly regulated issuers.
Unlike Circle’s USDC model, which captures reserve revenue before sharing a portion with partners like Coinbase and Binance, Open USD charges a small operating fee and distributes the bulk of reserve revenue to issuers and distributors, analysts said.
