USDC Issuer Circle’s Stock (CRCL) Under Pressure as BIS Flags Stablecoin Risks

Circle Internet Financial's stock (CRCL) dropped 11% on Wednesday, adding to a 15.5% decline from the previous day. Analysts cite valuation concerns and a critical Bank for International Settlements (BIS) report on stablecoin risks as key factors. Despite a 541% rally since its IPO, CRCL now faces increased regulatory scrutiny.

The BIS report recognizes tokenization's potential but warns that stablecoins lack the singleness, elasticity, and integrity needed for monetary system primacy. It concludes that unregulated stablecoins could threaten financial stability, casting doubt on Circle's USDC—the world's second-largest stablecoin.

While investor Optimism initially grew following progress on the GENIUS Act in the Senate, market sentiment has weakened as financial institutions question stablecoins' readiness for widespread adoption.