Circle (CRCL) is the most important player in the stablecoin ecosystem, according to investment bank William Blair, who initiated coverage on the company with an “Outperform” rating and a long-term bullish thesis.
The company sees Circle as a central force in the transition from fiat to blockchain-based payments, particularly in cross-border B2B transactions, a market worth up to $24 trillion, according to the report.
The bank’s thesis is based on the belief that stablecoin trading, led by USDC, will replace fiat in global trade payments. Circle, which makes money primarily from interest earned on USDC reserves, is expected to see this revenue stream increase as more institutions adopt stablecoins for faster and cheaper international transfers.
William Blair predicts that the market capitalization of USDC will double by 2027, reaching almost $150 billion. In this scenario, Circle’s adjusted EBITDA could exceed $1 billion, with margins increasing as the company diversifies beyond its largest distribution partner, Coinbase (COIN).
Although Circle’s current revenue model is heavily dependent on Treasury yields, the bank believes the real advantage lies in the infrastructure Circle is building to drive commercial use of USDC. The Circle Payments Network (CPN), a smart contract-based system designed to connect banks, blockchains and fintechs, and Arc, a dedicated layer 1 blockchain compatible with Ethereum, are key long-term bets.
Circle’s biggest risk, banknotes, is timing. Much of the current usage of USDC is still limited to trading cryptocurrencies, not trading. Wider adoption of stablecoins in businesses will take time.
Interest rate reductions, while reducing Circle’s yield revenue, could ironically help drive USDC adoption by reducing the opportunity cost of holding stablecoins relative to fiat currency.
Regulatory clarity is another obstacle. The GENIUS Act laid the groundwork for stablecoin oversight in the United States, but uncertainties remain over yield offerings and token classification.
The report also highlights the implications for Coinbase, which earns a portion of USDC’s reserve yield and functions as Circle’s largest distribution partner. William Blair believes that Coinbase is underappreciated as a strategic player in USDC adoption and expects strong future revenue growth from its role in the ecosystem.
Although Circle trades at a premium – 57 times expected EBITDA for 2026 – the bank says the valuation is justified given its long-term profit potential. If Circle succeeds in making USDC the global default for cross-border commerce, this premium could pay off.
