Financial analysis firm Bernstein has reaffirmed its “Outperform” rating for Circle Internet Group, setting a price target of $190, which suggests a potential upside of 203%. This assessment comes in the wake of the launch of Open USD (OUSD), a new stablecoin initiative backed by a consortium of over 140 companies, including major financial players like Visa, Stripe, Mastercard, BlackRock, and Coinbase. Despite the debut of OUSD, Circle’s stock (CRCL) saw a 17.5% decline on its first day of trading after the announcement.
Key Takeaways
- Bernstein maintains a positive outlook on Circle, with a price target indicating significant potential growth.
- The introduction of Open USD, supported by a broad industry coalition, presents a new competitive landscape for stablecoins.
- Coinbase’s involvement in the OUSD consortium has drawn attention, given its existing revenue-sharing agreement with Circle for USDC.
- Analysts suggest that OUSD’s consortium model may not immediately displace established stablecoins like USDC, which benefit from network effects and liquidity.
- Circle’s strategic partnerships and transaction volume growth are cited as factors supporting its market position.
Open USD is structured to operate under Open Standard, an independent entity governed by its partners rather than a single issuer. Key features include free minting and redemption processes without issuance caps, and a revenue-sharing model for reserve earnings across the partner network. Stripe’s stablecoin unit CEO, Zach Abrams, has been appointed as the founding CEO of Open Standard. Stripe has indicated that OUSD will become the default stablecoin for businesses on its platform, with a full rollout anticipated in the latter half of 2026.
Bernstein’s analysis suggests that while the large-scale backing of OUSD validates the stablecoin market, it does not pose an immediate threat to Circle’s established position. Circle’s USDC currently holds approximately 28% of the dollar stablecoin monetary base. However, its transaction volume is more telling, with USDC processing $5.3 trillion in the first half of 2026, a substantial increase that has seen its share of transaction volume grow from about 40% in 2025 to an estimated 60% in 2026, according to Bernstein’s review of Visa on-chain data.
The firm draws parallels to Tether’s (USDT) ascent, which was initially fueled by liquidity anchored to platforms like Bitfinex and subsequently Binance, before achieving a significant supply scale. Circle has followed a similar trajectory, leveraging its partnership with Coinbase, which holds about 25% of USDC on its platform, and expanding liquidity through other networks like Hyperliquid and Polymarket. Circle’s proprietary Arc blockchain also boasts over 100 partners across digital assets, payments, and financial services.
Circle CEO Jeremy Allaire echoed these sentiments, emphasizing the network-effect advantage in the stablecoin market. He argued that such networks are developed over years through sustained liquidity and regulatory compliance efforts, and expressed skepticism regarding the long-term viability of multi-company product consortia, citing a “dismal” track record of similar ventures achieving significant scale. Tether CEO Paolo Ardoino offered a brief acknowledgment of OUSD’s entry into the market.
Regulatory Precedents and Legal Stakes
The emergence of OUSD and the participation of major financial institutions like Visa, Stripe, Mastercard, and BlackRock highlight a growing trend towards institutional adoption and standardization within the stablecoin sector. This development occurs against a backdrop of evolving global regulatory frameworks. Jurisdictions worldwide, including the European Union with its Markets in Infrastructure Regulation (MiCA), are actively defining rules for stablecoins, focusing on issuer requirements, reserve management, and consumer protection. The legal stakes for companies involved are substantial, encompassing compliance with existing financial regulations, potential future legislation, and the management of systemic risk associated with large-scale stablecoin operations. The consortium model of OUSD, with its distributed governance and revenue sharing, could present novel compliance challenges and set new precedents for how stablecoins are regulated and operated, potentially influencing how future stablecoin initiatives are structured and scrutinized by authorities.
Bernstein specifically noted Coinbase’s involvement in the OUSD initiative as a significant point of interest. Coinbase benefits considerably from its relationship with Circle, earning approximately 50% of USDC’s reserve income through their distribution agreement. This arrangement constitutes a substantial portion, close to 20%, of Coinbase’s overall revenue. Allaire reiterated that Circle’s stablecoin partnership with Coinbase remains robust. Bernstein’s analysis suggests that Coinbase’s participation is likely aimed at broadening mainstream stablecoin adoption rather than signaling a shift away from USDC. This is supported by historical precedents where Circle and Coinbase shared reserve income with key partners like Binance and Hyperliquid to foster network retention.
Independent financial services firm William Blair has also reiterated its “Outperform” rating on Circle, characterizing OUSD as a solution that may not address a significant market need.
Original article : www.theblock.co