Circle president supports USDC, new rivals pressure CRCL share price

Circle President Heath Talbot defends the company's long-term strategy

Circle's share price has fallen sharply from its post-IPO high, and President Heath Talbot defends the company's long-term strategy.

Summary

Circle said that the size and network effects of the USDC are still advantages that are difficult for new stablecoin competitors to replicate. The launch of Open USD has put new pressure on Circle, with its share price well below its post-IPO high of nearly $260. Circle continues to expand its regulated infrastructure despite investors 'doubts about competition, profit margins and future stablecoin revenue sharing.

Talbot said in an interview with Fox Business Channel on July 14 that management is focused on building financial infrastructure rather than responding to short-term fluctuations in stock prices. The background of this interview was investors 'concerns about increasing competition in the stablecoin market. Circle's stock CRCL briefly approached $260 after listing, then fell to the range of about $60. Talbot said Circle is "looking long-term" and believes successful execution will ultimately support shareholder value.

Talbot highlights the network effect of USDC

Talbot said that Circle's main focus remains to build a full-stack Internet financial platform around USDC and related infrastructure. He believes that the company's value cannot be measured solely by daily stock price fluctuations, and points out that if Circle can achieve its broader mission, stock prices will naturally "come naturally." He also defended USDC against new competitors. Talbot pointed out that the USDC has approximately US$73 billion in circulation and has native support on 34 blockchains, making these network effects "extremely difficult to replicate." Circle describes USDC as a regulated digital dollar used for transactions, payments and settlements.

Open USD puts new pressure on Circle

The comments came as Open Standard launched its planned stablecoin, Open USD, which is backed by more than 140 participating companies, including Visa, MasterCard, Stripe, BlackRock, Bank of New York Mellon and Coinbase. Open Standard said partners can mint and redeem Open USD for free and receive reserve proceeds after deducting management fees. According to reports, after Open USD entered the market, Circle shares fell 17.5% to US$62.63, while CRCL was excluded from multiple Russell Growth Indices. The decline has heightened concerns that the new stablecoin model may squeeze Circle's profitability. Wall Street has also raised questions about the competition. According to reports, Mizuho has lowered Circle's share price target to US$50, believing that Open USD's share structure may compress profit margins and increase distribution costs.

Circle faces pressure from USDC economic model

The challenges faced by Circle come not only from new stablecoin issuers. JPMorgan Chase lowered its earnings forecasts for Circle and Coinbase after they reached a new revenue sharing agreement on USDC balances on the Hyperliquid platform. The bank said stronger adoption could be accompanied by lower yields on reserves retained by the company. Talbot rejected claims that competitors can quickly replicate USDC coverage. He described USDC as the largest regulated stablecoin and said it leads in actual transaction volume, viewing size and existing distribution channels as key parts of Circle's competitive advantage.

Circle continues to expand regulated infrastructure

Circle continues to add regulated infrastructure despite the stock price decline. On July 10, the company received final approval from the Office of the Comptroller of the Currency to establish Circle National Trust. The trust bank will first provide digital asset custody services and plans to possibly provide USDC reserve management services in the future. The approval reportedly places the new entity directly under federal supervision. Circle said the architecture could support broader adoption of its digital asset infrastructure in organizations. Talbot's comments put the decline in stock prices in the broader context of the battle for stablecoin distribution and reserve gains. Open USD has brought a large number of payment and financial companies to the market, while Circle continues to bet that USDC's existing network and regulated infrastructure will support its long-term status.