Japanese investment bank Mizuho maintains its neutral stance on Circle, asserting that the OCC's approval for a national trust bank does not resolve USDC's stagnating growth or increasing competitive pressures.
By Will Canny, AI Boost|Edited by Stephen Alpher Jul 13, 2026, 4:34 p.m. 2 min readMake preferred on ShareShare this articleCopy linkX (Twitter)LinkedInFacebookEmailMake preferred on Jeremy Allaire, Co-Founder, Chairman and CEO. (HK Fintech Week)SummaryShow- Mizuho noted that while Circle's final OCC approval for a national trust bank is a step forward, it fails to tackle the company's primary issues.
- The bank highlighted USDC's decreasing market capitalization since March as a significant concern.
- The report cautioned that the Open USD, a new consortium-backed stablecoin, could heighten competition and stress Circle's business.
Circle Internet Group's (CRCL) recent finalization of its approval from the Office of the Comptroller of the Currency to create the First National Digital Currency Bank is seen as a favorable development. However, Mizuho, a Japanese investment bank, suggests that the market may be overrating its importance.
"Although this is a positive move, we think the market's response is likely too optimistic, as it does not address the underlying issues that have been affecting the stock recently," analysts led by Dan Dolev stated in a report released on Friday.
Following the announcement, shares of the stablecoin provider rose by 5% on Friday, but by Monday, the stock had retraced most of those gains, trading 4.7% lower at $63.03.
Mizuho reaffirmed its neutral outlook, contending that the regulatory endorsement does not alleviate the fundamental challenges impacting the stock.
These challenges include a decline in USDC's market capitalization since March 2026, which the bank indicated raises concerns regarding the stablecoin's growth potential.
In recent months, Circle's USDC stablecoin encountered challenges, with its circulating supply dropping by approximately $7 billion from its March high to around $74 billion in July, as redemptions outstripped new issuances. This contraction marks the most significant monthly decrease since 2022 and has led analysts to worry that the slowing supply growth could negatively affect the firm's transaction and reserve-income projections, despite strong on-chain usage.
Moreover, the stablecoin market experienced its largest monthly shrinkage in years during June, indicating a withdrawal of on-chain liquidity as cryptocurrency markets remained stagnant near their 2026 lows.
Analysts also pointed to escalating competitive threats from Open USD, a newly launched stablecoin compliant with the GENIUS Act, developed by a consortium of over 140 financial and tech firms, including Mastercard (MA), Stripe, and Coinbase (COIN).
Mizuho warned that the rise of consortium-backed stablecoins highlights the risk of market commoditization, which could challenge Circle's ability to maintain a competitive edge, despite obtaining a national trust bank charter.
"We remain on the sidelines," the report concluded.
Read more: Circle soars after securing U.S. trust bank approval in crypto expansion
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Gate Leads Spot Market Share Gains as CEX Volumes Rise for First Time in Five Months
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CEX trading volumes rose for the first time in five months in June, with spot climbing 15.3% to $1.11T and RWA perpetual volumes surging to a record $311B.
By CoinDesk Research6 hours agoCEX trading volumes rose for the first time in five months in June, with spot climbing 15.3% to $1.11T and RWA perpetual volumes surging to a record $311B.
Why it matters:
CEX trading volumes rose for the first time in five months in June, with spot climbing 15.3% to $1.11T and RWA perpetual volumes surging to a record $311B.
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