Piero Cipolone issued a stablecoin warning, shocking Coinbase and Circle

Piero Cipolone warned that the widespread use of stablecoins could draw away deposits from traditional banks. At the same time, Coinbase shares fell 1.75% to $157, and Circle fell 6% for five consecutive trading days, trading close to $60.

Summary

Piero Cipolone warned that increased use of stablecoins may draw deposits away from traditional banks.

Coinbase shares are testing US$157 support, while Compass Point maintains its downside target of US$140.

Circle is still in the downward channel, and Mizuho predicts it may fall to US$50.

Members of the ECB's Executive Council raised this concern in a speech at the Cooperative Credit Bank Federation in Rome on July 17, where he linked increased use of stablecoins to a possible decline in customer deposits.

Cipolone believes that if stablecoins are more widely used, consumers may no longer be willing to deposit funds in traditional bank accounts. He advocated that the EU should speed up the launch of the digital euro to protect the role of banks in the financial system and reduce reliance on privately issued tokens.

His remarks added European voices to concerns already raised by U.S. banking groups in the CLARITY bill negotiations. In a letter to the Senate, the groups called for changes to Section 404 to prevent stablecoin companies from providing rewards or benefits through affiliated companies.

Banking groups have warned that interest-bearing stablecoins could suck deposits from community banks and weaken their ability to provide credit. Circle, which issues USDC stablecoins, has been particularly affected by the controversy, as any restrictions on stablecoin rewards could affect how exchanges and other partners promote USDC.

Stability coin concerns have deepened pressure on cryptocurrency stocks. Circle shares briefly fell to $58 in pre-market trading on July 17, the lowest level since February 2026, before recovering to around $60.46. Even after Casey Wood's ARK Invest purchased approximately $15.4 million in Circle stock, the downtrend continued.

Legislative uncertainty has also weighed on market sentiment. President Donald Trump reportedly met with senators on July 16 as Republicans try to resolve differences that have blocked passage of the CLARITY bill. The bill requires support from Senate Democrats, and disputes over ethics provisions and Trump's cryptocurrency interests complicate negotiations.

Coinbase faces another risk, as changes in U.S. market rules may affect stablecoin revenue, institutional services and trading activities. Compass Point analysts predict that COIN could fall to $140 if Congress fails to pass the CLARITY bill, and believe the bill's impact on stock prices could exceed Coinbase's second-quarter earnings report due to be released on July 30.

Compass Point reiterated its sell rating with a target price of $140. Key points: Compass Point maintains its sell rating on Coinbase with a price target unchanged at $140, believing its bullish outlook depends on passage of the CLARITY Act, while third-quarter guidance is expected to be disappointing due to deteriorating fundamentals.

Oppenheimer lowered its price target for Coinbase to $209, citing weak exchange trading volume. The revised target price is still higher than current market prices, but indicates a decline in expectations for trading revenue.

COIN and CRCL remain close to key support levels. Judging from the daily chart, COIN is testing the 78.6% Fibonacci retracement level of $156.92 after closing around $157.12. A break below this zone would expose psychological support of $150, followed by a May low of $139.13, close to Compass Point's $140 target.

COIN's MACD line has crossed the signal line and formed a positive histogram, indicating a weakening of bearish momentum. However, both lines remain below the zero axis, while the Relative Strength Indicator (RSI) stands at 45.77, below the neutral level of 50. The rally first needs to break through the $160 to $165 range to test the 61.8% Fibonacci level of $170.89.

Circle's daily chart shows CRCL in the downtrend channel that has dominated its decline from about $100 since early June. The US$58 to US$60 region remains the primary support level, and a break below this range could expose US$50, consistent with Mizuho's downside target.

Mizuho analysts also warned that the new OpenUSD stablecoin could seize Circle's market share, posing additional risks to CRCL's share price.

Mizuho Securities downgraded Circle to sell and lowered its price target to $50.

CRCL's MACD forms an early bullish cross below the zero axis, but the Chaikin Fund Flow Indicator is-0.29, indicating continued outflows. A close above channel resistance near $64 to $65 would weaken the bearish pattern, while another blocking could push shares back to $58 and the $50 Mizuho forecast.