Bernstein has maintained its Outperform rating and $140 price target for Circle Internet Group, arguing that the stablecoin issuer’s growth case does not depend on passage of the proposed Clarity Act. The call came after Circle shares gained more than 5% on Friday to close at $87.98, leaving Bernstein’s target about 59% above that level.
In a client note published Monday, analysts led by Gautam Chhugani said demand for Bitcoin and stablecoins reflects a changing macroeconomic environment, while stablecoins are also absorbing a growing supply of US Treasury bills. Circle earns a large share of its revenue from income generated on reserves backing USDC, making the relationship between stablecoin circulation, Treasury markets and interest rates central to its business model.
Bernstein’s position is that Circle has multiple routes to expand USDC usage, including payments, decentralized finance and tokenized markets, even if US stablecoin legislation remains stalled. That view places more emphasis on transaction activity and USDC’s role in on-chain markets than on a near-term regulatory catalyst.
USDC supply turns higher after months of declines
USDC supply rose by roughly $1.7 billion during the past week after almost six months of generally sideways movement and declines, according to Bernstein. A sustained recovery in supply would offer a more direct indication of renewed demand for Circle’s dollar-backed token than short-term movements in Circle’s share price.
Stablecoin supply tends to rise when users need dollar liquidity for crypto trading, settlements, collateral and transfers between blockchain-based applications. For Circle, more USDC in circulation also expands the pool of reserves held in cash and short-term US government securities.
Bernstein said stablecoins have become buyers of Treasury bills as token supply grows. The link has drawn increasing attention as dollar-backed tokens accumulate reserves at a scale that makes stablecoin issuers meaningful participants in short-dated government debt markets.
The report estimated that adjusted stablecoin transaction volume — excluding bot-driven and high-frequency activity — reached about $11 trillion in 2025. Through July, that measure was running at an annualized pace of approximately $17 trillion, up about 60% from a year earlier, Bernstein said.
Those figures suggest that stablecoin use is extending beyond crypto exchange settlement, though the report’s methodology separates activity that analysts consider economically meaningful from automated transactions that can inflate raw blockchain volume.
Circle’s USDC presence in on-chain markets
Bernstein estimated that Circle accounts for about 80% of decentralized-exchange trading and decentralized-finance volumes. The firm said USDC is increasingly used as collateral in decentralized finance, tokenized equities, perpetual futures linked to real-world assets and prediction markets.
Collateral use can be particularly valuable for a stablecoin issuer because it embeds the token in market infrastructure rather than limiting it to simple transfers. A trader who posts USDC as collateral, for example, may need to keep it on-chain while maintaining a position in a lending protocol or derivatives market.
The breadth of those uses also gives Circle exposure to areas where tokenized financial products are gaining traction. Tokenized equities and real-world-asset derivatives remain small beside conventional financial markets, but they require reliable dollar liquidity for margin, settlement and collateral management.
Bernstein also pointed to Circle’s Agent Stack, which the company launched in May to support software agents making payments and accessing paid services. The report said the platform hosts more than 900 paid services and that 99% of payment volume processed through its x402 agent-payment system settles in USDC.
x402 is designed to let software make small internet-native payments through a web standard, potentially allowing a program to pay for data, computing resources or online services without relying on conventional subscription systems. The business case remains early, but it could create payment demand that is distinct from trading and reserve income.
The supplied figures do not establish how much revenue Circle currently receives from Agent Stack activity, nor whether automated payments will become a material source of USDC demand. The data does show that USDC is the dominant settlement asset within Circle’s own agent-payment framework.
Clarity Act seen as an upside lever, not a requirement
Bernstein said the outcome of the Clarity Act would not alter its overall view of Circle. Under the current framework, third parties can offer stablecoin rewards, the analysts said. If legislation passes, those rewards could become more closely tied to user activity rather than simply to idle token balances.
That distinction matters to Circle’s commercial model. Rewards based on activity could encourage users to hold and deploy USDC within payments and financial applications, while rewards on passive balances are more closely linked to interest-rate conditions and promotional arrangements.
The note does not remove Circle’s exposure to lower interest rates. Since reserve income remains a major component of the company’s economics, Federal Reserve rate cuts could reduce the yield earned on USDC backing assets. Growth in circulation and transaction-led services would help offset that pressure, but it would need to be large enough to replace lower returns on a substantial reserve base.
Bernstein’s $140 target therefore rests on a view that Circle can increase USDC’s role across on-chain finance and emerging payment systems while preserving its leading position in dollar stablecoins. The projection also comes with a disclosed conflict: Chhugani holds long positions in cryptocurrencies, and Bernstein or its affiliates have had investment-banking and other business relationships with Circle during the past 12 months.
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