Shares of Circle Internet Group (CRCL -9.45%) are falling today, down 9.1% as of 2:57 p.m. ET. The drop comes as the S&P 500 (^GSPC 0.07%) and Nasdaq Composite (^IXIC 0.25%) were relatively flat.

The company, which IPO'd earlier this month, is the sole issuer of USDC, one of the most popular stablecoins on the market. Circle stock's recent massive run-up was tempered after a report critical of stablecoins was released from an international banking organization.

BIS disses stablecoins

The Bank for International Settlements (BIS), owned by 63 central banks from around the world, issued a report yesterday that questioned the supremacy of stablecoins as the digital answer for the modern economy. The report was encouraging of the use of "tokenization" and the digitalization of money, but said that stablecoins fall short in important ways.

According to the report, "stablecoins offer some promise on tokenization, but fall short of requirements to be the mainstay of the monetary system when set against the three key tests of singleness, elasticity, and integrity."

Circle Stock is hot, but there are issues

With a market cap of nearly $60 billion and sales last year of $1.7 billion, there is a lot of growth priced in already for Circle stock, and there are some key issues investors should be aware of.

One, the company's revenue is directly tied to interest rates, which are currently elevated. As the Federal Reserve cuts rates, which they are expected to do later this year, the company's bottom line will be hit by as much as 10% for each 0.25% cut.

Image source: Getty Images.

Two, a significant chunk -- roughly 50% -- of Circle's revenue is owed to Coinbase as part of the two companies' relationship. That percentage can change based on how much USDC Coinbase holds on its exchange. That means Circle's fate is directly tied to decisions made at another company. I would hold off on Circle stock.