Even before President Trump took office, the preference for stablecoins instead of central bank digital currency (CBDC) was strongly signalled by current U.S. Secretary of Commerce Howard Luttonick. Last month, Treasury Secretary Scott Bescent and federal government chairman Jerome Powell assembled Stable Coin as a de facto asset to keep the United States as the global reserve currency.
After all, a more decentralized ecosystem of tokenized dollars is more effective than the controversial CBDCs. Additionally, Stablecoin companies will drive demand for the US Treasury and earn yields in return by backing a stable T-Build.
Bank for International Village (BIS) confirmed this dynamic in its May report, noting that short-term treasury demand driven by Stablecoins is similar to “small quantitative easing of long-term yields.” This is a boon for both the US Treasury Department and the Federal Reserve. This is Circle Internet Group, Inc. This is one of the main reasons (NYSE: CRCL) had such a successful early public offering (IPO) in early June. Since then, CRCL shares have grown 161%, currently at $205 per share.
Further boosted by the passage of genius acts in the Senate in mid-June, where is the circle internet group heading next?
Greater integration with merchants
Fintech Company Fiserv, Inc. on June 23rd. After establishing a strategic collaboration with (NYSE: FI), Circle accelerated the adoption of Stablecoin USDC for digital banking. Fiserv covers a wide range of payment processing for banks, insurance companies, merchants, retailers, credit unions and securities brokers.
Fiserv plans to launch its own Stablecoin FIUSD, but the company will utilize Circle’s existing infrastructure, the Circle Payments Network.
At the end of June, Circle applied to become a National Trust Bank and founded First National Digital Currency Bank. The NA could be approved by the Office of the Secretary of Currency (OCC) considering the company’s institutionalized status.
Unlike regular commercial banks, National Trust Banks focuses on trust services such as asset management, custody, real estate planning and acting as an executor on behalf of trustees. This attracts wealthy individuals and institutions, but is also a necessary step for future genius law to become law.
Under this stable law, non-bank entities regulated by the OCC may issue steady coins, but practical operations require the federal government to act as a regulated trust institution. National Trust Bank does just that without engaging in classic banking activities such as savings and loans.
How circle economics works
The Circle chose BlackRock to hold a short-term overnight repurchase agreement with the US Treasury within the Circle Reserve Fund. These assets serve as a major support for USDC Stablecoin to maintain market volatility that withstands USD ratios. As of July 7, Circle Reserve Fund held $53.16 billion, with an average maturity of 4.14% yield over 30 days.
Within the wider crypto ecosystem, USDC’s market capitalization is $61 billion, lagging behind the dominant Stablecoin USDT from $159.5 billion tethers. USDT is popular for frictionless payments through Tron’s blockchain network, with Stablecoin’s overall advantage of 62%, while USDC isn’t too late.
Ethereum, the largest smart contract blockchain, has been in circulation at $38 billion, followed by Solana at $7.6 billion and a base of $3.7 billion. Circle doesn’t make money from activities on the chain, but the more USDCs are trusted, the more profits the company is. And the more this trust increases, the deeper the circle’s reserve pool, and the more interest income increases in the process.
For the full year of 2024, Circle earned a net profit of $155.7 million, with total revenue of $1.7 billion. In the first quarter of 2025 alone, Circle reported net profit of $64.8 million, with revenue of $579 million. The company’s operating profit rose 77% to $92.9 million compared to the previous year.
Circle’s Expected Profits
Based on estimates from seven analysts, the average circle revenue forecast for the quarter ending in September was $66173 million, with total revenues of $2.59 billion for the year, growing year-over-year at 55%.
But beyond 2025, the Federal Reserve is the main driver of the circle’s growth. If GRED Chairman Jerome Powell decides to cut interest rates, revenue from the circle’s reserve yields will be significantly reduced, as President Trump hopes.
Last Tuesday, Powell already confirmed that interest rates would fall this year without Trump’s tariffs.
“In fact, we were put on hold when we saw the size of the tariff and essentially all inflation forecasts substantially rise as a result of the tariffs.”
Jerome Powell, the Federal Reserve Chairman of the European Central Bank (ECB) Forum in Portugal
This could be offset by the widening involvement of AltCoin, but it is unlikely. Additionally, Circle faces multiple Stablecoin competitors. If genius acts become law, then in addition to the fiserv mentioned above, more companies could join the Stablecoin ecosystem. As a proper example, the Wall Street Journal reported in mid-June that both Walmart and Amazon were exploring the issuance of their own stubcoin.
In short, the circle has plucked up some institutional absurd momentum, but this is unlikely to continue at the same pace. Second, it could be a high point where the current price level of $205 per share advances.
Disclaimer: The author does not or has the position of the securities discussed in the article. All stock prices were quoted at the time of writing.
