Mizuho downgrades Circle to underperform, cuts price target to $50 on Open USD threat
Mizuho has downgraded Circle's stock to underperform, citing the competitive threat posed by the new OpenUSD stablecoin consortium. Analysts believe OpenUSD's revenue-sharing model could undermine Circle's business model and weaken its negotiating power with partners like Coinbase.
Why it matters
The emergence of industry-backed stablecoin consortia represents a significant shift in the competitive landscape of digital assets and financial infrastructure.
Japanese investment bank Mizuho downgraded Circle (CRCL) to underperform from neutral and slashed its price target to $50 from $85, arguing that OpenUSD's business model threatens the stablecoin issuer's long-term economics.
Circle shares were trading 0.6% lower at $62.63 at publication time.
Open USD , a dollar-backed stablecoin unveiled June 30 by the Open Standard consortium, "could fundamentally alter CRCL's business model, which relies on retaining a large portion of the treasury yield to drive revenues," analysts led by Dan Dolev said in the Tuesday note to clients.
The consortium counts more than 140 partners, including Mastercard (MA), Stripe, Coinbase (COIN) and BlackRock (BLK).
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