Circle Internet Group ($CRCL)
Stablecoin Expansion & the Emerging Agentic Economy
Conclusion:
The market is pricing Circle as a rate-sensitive money market fund — a bet on the Fed Funds Rate sitting on blockchain rails. We think this framing misprices the business. USDC supply grew 72% in 2025 to $75.3 billion even as the Fed cut rates 75bps over the second half of the year, demonstrating that USDC demand is driven by genuine utility adoption rather than pure yield-seeking behavior. Our base case projects the total stablecoin market reaching ~$1.5 trillion by 2030, with average USDC supply at $284B billion. Even with reserve yields expected to compress, we expect Circle’s reserve income to grow to $9.2 billion in 2030 (~3.5x from 2025) as supply growth overwhelms rate compression. Combined with Circle Payments Network (CPN) scaling to $350 million in revenue and distribution costs declining from 60% to 55%, our base case projects total revenue of $9.8 billion and net income of ~$1.8 billion by 2030.
Several tailwinds are supporting this trajectory: the GENIUS Act has created a federal stablecoin framework favoring compliant issuers; Circle Payments Network is gaining early traction with 55 financial institutions enrolled and $5.7 billion in annualized TPV, providing a transaction-based revenue stream that diversifies away from rate sensitivity; and stablecoin adoption is broadening across B2B payments, cross-border settlement, and DeFi. Our base case produces 2030E EPS of $6.73, implying a price target of ~$168 at a 25x terminal P/E, representing 83% upside from current levels.
Comps Table:
There is no direct public comp for a stablecoin issuer monetizing reserve float. Our comp set spans companies that share key attributes of Circle’s business: float-based revenue models (Schwab, Interactive Brokers), digital payments infrastructure (PayPal, Wise, dLocal, Bill.com), crypto-native platforms (Coinbase), and high-growth infrastructure with usage-based economics (Snowflake, Confluent).
What Does Circle Do?
Circle is the issuer of USDC, a dollar-denominated stablecoin pegged 1:1 to the US dollar. When a user deposits USD, USDC is minted; when they redeem, it is burned. The reserves (approximately 43% reverse repos, 43% T-bills, and 14% bank deposits, custodied at BNY Mellon and managed via BlackRock’s USDXX fund) generate yield that constitutes Circle’s primary revenue.
The critical cost structure nuance: Coinbase, as USDC’s primary distribution partner, receives 100% of reserve income on USDC held on its platform and 50% on off-platform USDC. In 2025, Coinbase took $1.35 billion, 51% of Circle’s gross reserve income. Including non-Coinbase distribution (12.7%), total distribution costs consumed ~61% of reserve income, leaving a 39% gross margin. We model distribution costs declining from 60% to 55% by 2030 as non-Coinbase distribution grows, and new financial institutions, banks, and custodian partners negotiate deals more favorable than Circle’s current one with Coinbase. This drives gross margin expansion from 39% to 54% over the projection period.
Beyond reserve income, Circle’s most important growth lever is Circle Payments Network (CPN), a cross-border B2B settlement network built on USDC. CPN launched in May 2025 and has enrolled 55 financial institutions with $5.7 billion in annualized TPV and a 500-FI pipeline. We model CPN scaling to $175 billion in TPV by 2030 at a 0.2% take rate (aligned with the 20bps blended cross-border rate), generating $350 million in transaction-based revenue. This revenue is rate-insensitive and diversifies Circle away from pure reserve yield dependency. Additional revenue lines (referred to as “Other revenue” in our model) include CCTP (47–50% of cross-chain bridge volume) and Arc settlement infrastructure, which we model at $207 million combined by 2030E.
Thesis #1: Supply Growth Overwhelms Rate Compression
The total stablecoin market expanded from ~$137 billion in 2022 to ~$308 billion in 2025. Our model projects ~$1.5 trillion by 2030, a ~37% CAGR. Today, total stablecoins in circulation (~$316B) represent roughly 1.4% of the $22.7 trillion US M2 money supply. Our base case implies ~6%, still a modest share of dollar-denominated liquidity.
We predict USDC maintains 22–25% market share (modestly declining from 24.8% as white-label and bank stablecoins fragment the space), producing $338 billion in USDC supply by 2030 (~4.5x increase from today). Put simply, even if Circle’s effective reserve yields fall, the sheer growth in USDC supply — from $63 billion to $284 billion on average — more than compensates. As a result, reserve income rises 3.5x, from $2.64 billion to $9.24 billion.
At the current stock price, a reverse-DCF implies the market is discounting ~$120–150 billion of USDC supply by 2030, which is roughly a 60–100% increase from today. Our base case models a 350% increase. That gap is the core of the investment case.
Thesis #2: Agentic Commerce Will Drive the Next Wave of Stablecoin Demand
AI agents are on a trajectory to autonomously execute transactions by 2030. McKinsey projects $3–5 trillion in global agentic commerce sales by 2030; Gartner estimates AI agents will intermediate over $15 trillion in B2B purchases by 2028. These transactions structurally require stablecoin rails:
Stablecoins are becoming the settlement layer for this emerging agent economy, and Circle’s business model scales with it. As agents hold USDC in wallets to fund autonomous transactions, Circle earns yield on every dollar sitting in those reserves. The larger the pool of agent-held USDC, the larger the revenue base, regardless of transaction frequency.
USDC is already the default stablecoin for agentic payments. In the six months since the x402 payment standard (HTTP-native micropayments) gained traction, it has processed ~$106 million in volume across ~177 million transactions. Over 99.6% of this volume has been settled in USDC.
The first-mover advantage creates a flywheel where new builders default to USDC-support because it has the deepest integrations, which deepens the integrations further, which makes it harder for alternatives to break in. We do not model agentic revenue in the base case but agentic demand is embedded as upside optionality in our bull scenario. If even 1–2% of McKinsey's low-end $3 trillion projection settles on USDC rails, that implies $30–60 billion in incremental USDC float in agent wallets, all of which Circle may earn passive yield on.
Valuation & Scenarios
We value CRCL using a terminal P/E on 2030E EPS. Our base case produces net income of $1.84 billion on 273.9 million diluted shares, yielding EPS of $6.73. A 25x terminal P/E — a premium to the comp-weighted average, reflecting Circle’s structural growth trajectory, CPN-driven revenue diversification, and regulatory moat— implies ~$168 per share in 2030, representing 83% upside from current levels.
The 25x multiple sits between JPMorgan (JPM) at ~15x and Coinbase at ~38x, appropriate for a high-growth infrastructure business transitioning toward recurring, rate-insensitive revenue.
Base Case: Assumes continued execution on supply growth and CPN scaling, with the stablecoin market reaching $1.5 trillion and USDC maintaining 22.5% share. Distribution costs decline modestly to 55% as new financial institution partners negotiate lower revenue shares. Exit at a 25x terminal P/E on 2030E earnings, implying a price target of $168.34 — 82.7%% upside with a 16.3% IRR.
Bull Case: Assumes accelerated stablecoin adoption driven by favorable regulation, CPN network effects, and widespread TradFi onboarding. Total stablecoin market reaches $2.3 trillion with USDC capturing 30% share. Distribution costs compress to 50% as non-Coinbase origination scales. Exit at a 35x terminal P/E on 2030E earnings, implying a price target of $482.10 — over 423% upside with a 51.2% IRR.
Bear Case: Assumes stablecoin adoption slows, white-label stablecoins erode USDC market share to 20%, and rate cuts compress reserve yields to 2.75%. CPN traction disappoints. Exit at a 15x terminal P/E on 2030E earnings, implying a price target of $46.92 — approximately 49% downside with a -15.5% IRR.
Management
We view management quality as above average for the crypto infrastructure space, with particular strength in regulatory navigation (49 state MTLs, first-mover MiCA compliance).
Jeremy Allaire co-founded Circle in 2013 and serves as Chairman and CEO. A serial entrepreneur (previously CTO of Macromedia, founder/CEO of Brightcove, IPO 2012), Allaire pivoted Circle from a consumer payments app to stablecoin infrastructure, launched USDC with Coinbase in 2018, navigated a failed SPAC in 2022, and completed a traditional IPO on the NYSE in June 2025.
Heath Tarbert serves as President, elevated from Chief Legal Officer in January 2025. Tarbert is the former Chairman and CEO of the CFTC (2019-2021), former Assistant Secretary of the U.S. Treasury, and former CLO of Citadel Securities.
Jeremy Fox-Geen has served as CFO since January 2021. Previously CFO of iStar/Safehold (NYSE-listed REITs) and CFO of McKinsey & Company’s North American business. He oversaw Circle’s IPO and manages the USDC reserve architecture supporting $70B+ in circulation.
Dante Disparte serves as Chief Strategy Officer and Head of Global Policy and Operations. Previously founding executive and Vice Chairman of the Diem Association (Meta’s stablecoin project), he leads global regulatory strategy, public policy, market expansion, and international operations.
Primary management risk is founder concentration and elevated post-IPO SBC (over $500M in 2025, including $424M in IPO-related RSU acceleration), which is already normalizing (Q3 and Q4 2025 SBC ran at $59M and $48M respectively, trending toward a sub-$200M annual run-rate).
Risks
White-Label & Platform-Native Stablecoins
The most underappreciated risk to USDC’s market share is platforms, major applications, and financial institutions launching their own branded stablecoins. For example, Hyperliquid has USDH, PayPal has PYUSD, Fidelity has FIDD, and JPMorgan has JPMD. And recently, Polymarket recently introduced “Polymarket USD,” which is a USDC wrapper today, but likely a stepping stone toward independent settlement. If this playbook scales under the GENIUS Act framework, USDC could slowly lose its position as the default settlement rail. Our base case models USDC market share declining from 24.8% to 22.5% by 2030 to reflect this fragmentation.
Mitigant: White-label stablecoins still need reserve infrastructure, compliance, and — most importantly — deep liquidity. Given USDC is integrated across every major exchange, wallet, DeFi protocol, and bridge, a new branded stablecoin would need to replicate that liquidity network before it could function as a standalone settlement token. Deep liquidity pools, tight spreads, and instant redeemability are not easy to bootstrap, and fragmented stablecoins with thin liquidity create worse execution for users. The switching costs to bootstrap fully independent reserves are high enough that most platforms may never complete the transition.
Federal Funds Rate Sensitivity
Reserve income is directly tied to interest rates. Every 100bps of cuts on $284B average USDC (2030E) equates to ~$2.8B in lost gross reserve income. If the Fed cuts to 2.0%, 2030E reserve income falls 25–30% versus our base case. Kalshi prediction markets currently price a 63% probability of further cuts before 2027.
Mitigant: Even at a 2.5% yield, $284B in average USDC produces $7.1B in reserve income, which is still 2.7x the $2.64B earned in 2025 at 4.19%. Supply growth overwhelms all but the most extreme rate scenarios.
Single-Product Concentration & Coinbase Dependency
USDC reserve income was over 96% of 2025 revenue. Coinbase controls ~67% of US crypto exchange share and takes 51% of reserve income. As previously mentioned, Coinbase launches its own stablecoin, renegotiates terms aggressively, or if regulatory headwinds slow USDC supply growth, the entire revenue base is at risk.
Mitigant 1: Given that Coinbase earns $1.35B annually from their arrangement with effectively zero balance sheet risk, it seems unlikely that they would choose to launch a competing stablecoin. If they did, it would require Coinbase to build regulatory infrastructure and liquidity that Circle spent years constructing.
Mitigant 2: The market made a similar critique of Visa for years (that they was a single-product business), but Visa’s value-added services generated over $10.9 billion in 2025 (up 24% YoY), demonstrating its reduced dependence on interchange fees. We see CPN as the key diversification lever for Circle. By end of 2030, we project CPN will generate $350 million in transaction-based revenue (~4% of total), which is both rate-insensitive and independent of the Coinbase relationship. Over time, institutional and B2B USDC origination that bypasses Coinbase should also organically reduce blended distribution costs.
Tether Resilience & Competitive Landscape
USDT currently has nearly 2.5x the supply of USDC, and Tether is actively closing the regulatory gap that USDC has capitalized on. In January 2026, Tether launched USAT, a GENIUS Act–compliant stablecoin issued through Anchorage Digital Bank (OCC-regulated), giving Tether a path into the US institutional market it was previously locked out of. If Tether successfully runs a dual strategy (USDT for global liquidity, USAT for US compliance), USDC’s regulatory moat narrows considerably.
Mitigant: The competitive landscape is nuanced. USDT dominates centralized exchange trading outside the US and emerging-market remittances, while USDC dominates DeFi collateral (default on Aave, Compound, Uniswap), US institutional adoption, cross-chain bridging (CCTP at 47–50% of bridge volume), and B2B payments ($235B in 2025, +733% YoY, with USDC capturing ~65%). These are effectively different products serving different TAMs. With that said, our thesis is built upon total stablecoin market expansion rather than marketshare gains at Tether’s expense. Both stablecoins will grow considerably.
Disclosure: This material is provided for informational purposes only and does not constitute investment advice, financial advice, trading advice, or any other form of advice. The views expressed are those of the authors and should not be relied upon as a recommendation to buy, sell, or hold any asset. The authors or affiliated entities may hold positions in the assets discussed. You should conduct your own research and consult appropriate financial professionals before making any investment decisions.