Japanese investment bank Mizuho downgraded Circle (CRCL) from neutral to underperform and reduced its price target from $85 to $50, arguing that OpenUSD’s business model threatens the stablecoin issuer’s long-term economics.
Shares of Circle were trading down 0.6% at $62.63 at press time.
Open USD, a dollar-backed stablecoin unveiled June 30 by the Open Standard consortium, “could fundamentally change CRCL’s business model, which relies on retaining a large portion of Treasury yield to generate revenue,” analysts led by Dan Dolev said in Tuesday’s 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 around $10 billion since May, amid slowing crypto trading activity and increasing competition from newly regulated issuers.
Unlike Circle’s USDC model, which captures reserve revenue before sharing a portion with partners such as Coinbase and Binance, Open USD charges small operating fees and distributes most of the reserve revenue to issuers and distributors, analysts said.
