Circle Internet stock popped last week after the digital payments company won federal approval to establish a crypto bank -- but the gains are already fading.

Shares dropped 0.6% to $62.60 ahead of Tuesday's opening bell, having fallen 4.8% the previous session. Futures tracking the S&P 500 were down 0.1%.

Mizuho downgraded Circle stock to Underperform and cut its price target to $50 from $85 on Tuesday, citing the threat posed by the dollar-pegged stablecoin Open USD, which launched last month with more than 140 partners including Visa, Stripe, and Mastercard.

Circle's USDC has reigned for years as a dominant stablecoin, with a valuation of $72.9 billion as of Tuesday -- but Mizuho warned that the rival token could chip away at its market share.

Circle makes money by putting investors' cash into U.S. Treasury bills, then keeping most of the interest income. Open USD will operate a "pass-through" model, returning most of said yield to its partners.

Mizuho analysts wrote that Open USD could be "Circle's Cryptonite," adding that the token "could fundamentally alter Circle's business model, " noting it would likely comply with Congress' GENIUS Act, which aims to establish a regulatory framework for stablecoins.

Circle said last week that the U.S. Office of the Comptroller of Currency had approved it to establish a national trust bank for digital currency, bringing USDC under federal oversight.

Shares jumped 5% following the announcement, but they have since given up all those gains as crypto prices drop and worries about the launch of Open USD mount.

Write to George Glover at george.glover@dowjones.com

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July 14, 2026 09:34 ET (13:34 GMT)

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