Circle and Stablecoins

The Genius Act has changed the U.S.’s relationship with crypto, making the US the most attractive country in the world for stablecoins.  Stablecoins are very disruptive to the world of finance.

The pace of stablecoin adoption is not yet clear, however financial incumbents are highly likely to get disrupted over the longer term. Investing in CRCL will be tough for most institutional investors as it is early, however the CRCL business model is attractive if USDC can scale. We think that USDC will need to increase ~10x to make a reasonable IRR, which is a big ask.

Blockchains will replace legacy systems. SWIFT will be the first casualty. We don’t see V and MA at risk in the next 5 years.

We see stablecoins having the potential to reach >$2Tn market cap in next few years from current $260bn.

Upside: $398 (+150%)

Downside: $71 (-55%)

Link to Research