Why Did Circle Internet Stock Fall 11.9% This Week?

Shares of Circle Internet (CRCL) dropped 11.9% this week, underperforming broader market indices. The decline coincides with growing institutional skepticism toward stablecoins in favor of blockchain-based tokenization.

U.K. banks are spearheading a pilot program for tokenized deposits, following Bank of England Governor Andrew Bailey's warnings about stablecoin risks. The initiative leverages blockchain technology for faster settlements and enhanced security while maintaining banking system liquidity.

Tokenization creates unique digital representations of traditional assets on distributed ledgers. This approach delivers blockchain efficiencies without the systemic concerns Bailey raised about private stablecoins draining liquidity from conventional banking channels.

While the U.S. has established clearer stablecoin regulations through the Genius Act, major financial institutions appear to be prioritizing deposit tokenization over stablecoin adoption. The market shift reflects deepening institutional engagement with blockchain infrastructure beyond speculative crypto assets.