Bernstein sticks with $140 Circle target even if stablecoin bill fails

Circle Internet Group could still see a 59% rally even if Congress fails to pass the CLARITY Act during the September session, Bernstein analysts led by Gautam Chhugani wrote in an Aug. 24 note. The brokerage maintained its Outperform rating and $140 price target on the CRCL stock, which closed Friday at $87.98.

Bernstein tied its bullish case to expanding USDC adoption across payments, tokenized assets and autonomous software-agent transactions. The analysts said Circle's next growth cycle “is independent of the Clarity Act passing in the September session.”

The stock gained more than 5% on Aug. 21 before the close. The $140 target implies about 59% upside from that level, though it remains below the earlier $190 target Bernstein set this year.

USDC supply had been largely flat for about six months. During the past week it increased by roughly $1.7 billion, the brokerage said. Bernstein estimated that Circle's stablecoin accounts for about 80% of decentralized-exchange trading and finance volumes.

Adjusted transaction volume, which strips out bots and high-frequency activity, reached about $11 trillion during 2025 and was running at an annualized pace of roughly $17 trillion through July 2026, according to Bernstein. That represented a year-on-year increase of about 60%.

Chhugani's team pointed to demand from stablecoin payments, blockchain-based capital markets, tokenized assets and payments by autonomous software agents. They also cited changing global liquidity conditions. Bitcoin has benefited from demand for scarce assets, Bernstein said. Stablecoins have become another destination for dollars as the U.S. Treasury issues more short-term government debt.

Circle has been expanding the institutional infrastructure for USDC. In July the Office of the Comptroller of the Currency approved Circle National Trust, a federally supervised national trust bank that can provide digital asset custody services. Circle said the structure could eventually place management of the reserves backing USDC within the federally regulated entity.

Standard Chartered introduced direct USDC minting and redemption access for institutional customers during the second quarter, Circle said. A July integration brought USDC settlement through Fireblocks, letting institutions manage balances across supported blockchains and route payments into local fiat currencies through Circle Payments Network.

Fireblocks said stablecoins accounted for 69% of transaction volume across its platform during the second quarter. Circle said its Payments Network reached $14.7 billion in annualized transaction volume at the end of the quarter.

Machine-to-machine payments are another pillar of Bernstein's thesis. Circle launched Agent Stack in May, infrastructure that lets software agents hold assets, discover services and make programmable payments. By the second quarter, the platform had more than 900 paid services, and 99.3% of x402 agent-payment volume settled in USDC, according to Circle.

A Keyrock report covered in May found that AI agents had settled $73 million across 176 million transactions over 12 months. USDC handled 98.6% of those payments. Circle built Agent Wallets, an agent marketplace and nanopayment tools around the same use case. Agent Stack lets developers set spending limits, allowlists and other controls, the company said, without requiring a human to approve each USDC transaction.

For Bernstein, adoption of those services could create another source of stablecoin transaction demand outside cryptocurrency trading.

Regulation remains one of the largest variables for Circle. U.S. lawmakers are still negotiating how stablecoin rewards and digital asset market structure should work. Bernstein said the CLARITY Act's outcome would not materially change its investment case.

Failure to secure Senate support during the expected Sept. 15 vote could prompt the SEC and CFTC to take a larger role in providing regulatory guidance, according to the brokerage. “We believe, the SEC/CFTC intervention would accelerate if the Senate does not support Clarity in the Sept. 15 vote,” Bernstein wrote.

Stablecoin rewards are one of the contested parts of the legislation. Under the scenario where the bill fails, third-party reward programs would continue operating under the existing model. If the legislation passes, Bernstein expects rewards to become more closely tied to customer activity rather than payments for holding an idle stablecoin balance. The brokerage views either structure as workable for USDC.

The brokerage has held that position even as the language around stablecoin incentives changed. In May, Bernstein backed Circle's regulatory position after lawmakers advanced language restricting deposit-like yield on passive stablecoin balances. Such restrictions could prevent stablecoin issuers from competing mainly by paying higher returns to token holders, the analysts said then, reducing pressure on Circle to enter an interest-rate competition.

Banking groups have since pushed lawmakers to tighten the rules further. Several U.S. banking organizations urged Senate leaders in July to revise provisions on stablecoin rewards, arguing that some structures could still function like interest-bearing accounts.

Bernstein's bullish call comes as Circle faces increased competition. Open USD uses a consortium structure that distributes part of the reserve economics to participating companies, a model different from Circle's approach of earning income from the assets backing USDC. Mizuho downgraded Circle to Underperform in July and cut its target to $50, citing pressure Open USD could place on margins.

Circle President Heath Tarbert argued that USDC's liquidity, existing integrations and regulatory infrastructure would be difficult for new competitors to reproduce quickly.

Circle has continued adding payment partners. Its agreement with Japan's JCB, announced in July, includes tests of USDC for corporate treasury transfers before possible use in merchant payments. Separate partnerships with Kakao and Toss are examining stablecoin settlement and programmable payments in South Korea. USDC entered BNY's Digital Asset Custody platform in June, allowing institutional customers to mint, redeem, hold and transfer the stablecoin through the bank.

Bernstein disclosed that Chhugani holds long positions in several cryptocurrencies and that the brokerage or its affiliates have maintained investment banking or other business relationships with Circle during the past 12 months.