Author: Biteye

Dozens of financial companies including Visa, Stripe, Mastercard, BlackRock, and Coinbase are pushing for a new stablecoin called OUSD. Following this news, CRCL's stock price first dropped as a precaution.

If traditional finance, payment networks, and exchanges all start to issue stablecoins together, how much of a moat does USDC really have left? The sharp decline in CRCL's stock price essentially reflects this concentrated concern.

So the question arises: Is Circle an overvalued "interest margin bank" or a stablecoin infrastructure leader misunderstood by the market?

Let’s take a look at the fierce debate around Circle, along with the main points from both sides👇

📈 Bullish on Circle / The stablecoin market will expand

First Debater Dayu @BTCdayu I XHunt Ranking 657

Dayu holds a neutral optimistic view, suggesting that CRCL is like early Tesla, and the compliance of stablecoins is a trend akin to open source; the market will grow long-term, but the process won't be smooth.

He believes that USDC is still the most important player in the compliant stablecoin space, but the moat is not permanently safe; it will continue to face three types of challenges: competition from new stablecoins, pressure from Coinbase's revenue share, and how much of the market compliant B-end USDC can actually capture.

Core Viewpoint: CRCL is worth observing and long-term attention, but it cannot be held onto solely based on faith. What truly determines valuation is the future ecosystem of the C-end, trading scenarios, prediction markets, etc., and whether they will choose USDC, USDT, or other stablecoins.

Second Debater Crypto Weituo @thecryptoskanda I XHunt Ranking 1008

Crypto Weituo stated: based on experience, when seven or ten ministries issue documents, it’s often just noise, but if a specific ministry, like the Ministry of Public Security or the Organization Department, issues a document, it’s serious.

Core Viewpoint: The more co-signers there are, the less accountability there is. This is true for red-headed documents, and the same goes for stablecoins.

Third Debater Blue Fox (@lanhubiji) XHunt Ranking 1506

Believes that OUSD will not end the stablecoin wars, nor will it fully claim the stablecoin market, but it can indeed capture a piece of the pie.

Although OUSD is backed by over 140 companies, including Visa, Mastercard, BlackRock, Coinbase, Stripe, Shopify, Google, etc., which naturally have payment channels, merchant networks, banking partnerships, and institutional resources, there is an opportunity for quick entry in scenarios like enterprise payments, settlements, cross-border remittances, and RWA.

Core Viewpoint: OUSD will not easily replace USDT / USDC. USDT still has the strongest liquidity and trading depth, while USDC is already ahead on the compliance path, with solid transparency and institutional adoption. OUSD will pressure Circle, but that does not mean the end of USDC.

Fourth Debater Honest Mike @Michael_Liu93 I XHunt Ranking 1708

Mike believes that the market is overly concerned about Circle being replaced by traditional financial giants. Stablecoins are not about simply issuing a coin; they require channels, user mentality, trading scenarios, and long-term liquidity accumulation.

Many large platforms have previously attempted stablecoins: Binance's BUSD / FDUSD / TUSD, Hyperliquid's USDH, Huobi's HUSD, OKX's USDK, Gemini's GUSD, Kraken's USDG, Tron’s USDD; ultimately, the main players that have emerged are still USDT and USDC.

Core Viewpoint: When Stripe, Visa, Mastercard, BlackRock, and Coinbase collaborate on stablecoins, it is not to eliminate USDC, but rather to collectively expand the market for stablecoin payments and consumer-level crypto. Traditional finance opening the door might actually benefit USDC and USDT.

Fifth Debater Wu Fan @wufantouzi I XHunt Ranking 2687

Believes that the real question the market is raising is not about the stablecoin segment, but about CRCL itself. However, USDC remains the absolute leader in the compliant stablecoin space; while there are many competitors, data has yet to prove that they can truly challenge USDC.

Core Viewpoint: CRCL's valuation should not be viewed like regular financial stocks but rather priced based on the long-term potential of the stablecoin segment. Previous estimates based on a 24% market share do not imply that USDC captures 100% of the market.

Regarding new stablecoins like USDG, he believes that the short-term noise is greater than the actual threat: USDG has a supply of about 3 billion dollars, with a market share of less than 5% of USDC. Similar to every GPU manufacturer wanting to challenge Nvidia, the advantage of being a leader cannot simply be declared.

🙅 Bearish on Circle / Stablecoins have no moat

First Debater Phyrex (@PhyrexNi) XHunt Ranking 774

Believes that USDC will still have a large market, especially in the compliant crypto trading field in the US, but Circle's problem lies in: it has preached the USDC payment narrative for many years but is now facing challenges from banks and payment giants.

The true difficulty of stablecoins does not lie in issuance, but in "acceptance." Banks have corporate accounts, cross-border settlements, payment networks, institutional clients, and channels for USD inflow and outflow; if banks issue their own stablecoins, they are naturally better suited for enterprise payments, institutional settlements, and cross-border scenarios.

Core Viewpoint: The starting point for OUSD is not just to engage in cryptocurrency trading, but to aim for payments and acceptance. What Circle can do, Open USD can also do. What Circle currently cannot achieve, Open USD might accomplish by relying on banks and payment networks.

Second Debater Colin Wu @colinwu I XHunt Ranking 971

Believes that whether it’s the sharp drop in CRCL’s stock price or the collaboration of hundreds of authoritative institutions to create stablecoins, both indicate that the stablecoin segment will be reshaped in the long term by regulation and traditional finance.

Core Viewpoint: Stablecoins, like other products in the crypto space, fundamentally satisfy the demand for "regulatory evasion." However, as scale expands, stablecoins will inevitably be regulated, which may actually reduce demand. Once fully compliant, the distinction between stablecoins and traditional digital dollars will not be significant.

Stablecoins are centralized dollar-mapped currencies, not the so-called "GPT moment" for the crypto industry. What will truly determine the stablecoin landscape in the future is not just the issuance volume, but also regulation, application scenarios, and the ecosystem within the circle.

Third Debater Xu Chonglang @cyrilxuq I XHunt Ranking 1983

Believes that stablecoins do not have a strong moat; all Web2 banks, payment companies, Visa, and Mastercard can compete in this space.

Core Viewpoint: The real core technology of stablecoins is not in issuance but in card organizations + clearing networks. If Visa can reduce the cost of settlement banks from 1.5% to 0.1% in the future and directly connect the card issuers, merchants, on-chain KYC, and payment networks, then users could directly swipe their issued stablecoins at POS machines.

Fourth Debater Xiaoya XTony @xtony1314 I XHunt Ranking 3666

Believes that likening CRCL to Visa / Mastercard is absurd. Visa earns payment channel fees, while Circle issues stablecoins; the essence lies in making money from the interest margin between dollars and treasury bonds, and the business models of the two are completely different.

Core Viewpoint: Users using USDC do not need to pay extra fees to Circle, making it difficult for CRCL to continuously take a cut like Visa. CRCL’s core income comes from treasury bond interest, but this income is affected not only by the interest rate cycle but also has to be shared with Coinbase, making the profit model less attractive.

He also argues that what truly resembles Visa are public chains like ETH, Tron, and Solana, which collect "tolls," rather than stablecoin issuers.

Fifth Debater Jiang Zhuoer @Jiangzhuoer2 I XHunt Ranking 5213

Has held a pessimistic view on CRCL since the end of 2025, believing that Circle is essentially more like an "interest margin bank," rather than a high-growth tech stock.

Core Viewpoint: CRCL's main profit comes from treasury bond interest income, but future interest rate cuts will compress the margin; at the same time, a significant portion of the profits must be shared with Coinbase, resulting in instability in profitability.

He also believes that Circle's biggest risk is not competition but policy. Stablecoins rely on treasury bond interest income, but this model in the blockchain market is "eating interest margins based on policy"; once regulation prohibits or restricts related income distribution, the profit logic may be completely shattered.

🌟 Summary of Both Sides' Views

The Bullish Side Believes:

New stablecoins like OUSD currently seem lively, but there is no data proving that they can genuinely challenge USDC.

Stablecoins cannot just be issued by anyone; the core lies in channels, liquidity, user mentality, and trading scenarios. The involvement of traditional financial giants does not necessarily aim to eliminate Circle; instead, it may be about expanding the market for stablecoin payments and consumer-grade crypto.

The Bearish Side Believes:

Circle's moat is not as deep as imagined. The barriers to issuing stablecoins are low; what is truly valuable is the payment clearing network and financial channels, which are precisely controlled by Visa, Mastercard, banks, and traditional financial institutions.

At the same time, CRCL primarily makes money from treasury bond interest; if interest rates drop, revenue-sharing pressures increase, or regulation restricts income distribution, the valuation logic will be re-priced.