Bernstein sees 70% upside for Circle on USDC payments

Bernstein projects a 70% upside for Circle in a recent research note, pointing to rising use of USDC in payments and new payment flows tied to artificial intelligence.

Analysts highlighted growing demand for faster, lower-cost digital-dollar settlement across commerce and financial services. The note identifies payments for AI compute, data access and machine-to-machine transactions as emerging use cases that could increase on-chain activity.

The firm expects stablecoins to be used more often for real-time payments, cross-border transfers and micropayments that traditional payment rails handle less efficiently. Bernstein cited small, frequent payments in AI ecosystems — for datasets, model access or compute time — as an example where token-based settlement may be preferred over slower bank transfers or card rails.

Circle issues USDC, a dollar-pegged stablecoin used for trading, remittances and settlement in cryptocurrency markets. The company also offers business products, including treasury services and APIs that support fiat on-ramps and off-ramps for developers and corporate customers.

The research note states that broader acceptance of USDC as a payment medium could raise transaction fees, custody balances and revenues from business services as on-chain commerce and machine-to-machine interactions increase.

Bernstein identified regulatory treatment, reserve transparency and integration with existing payment infrastructure as key variables for stablecoin adoption. U.S. regulators have increased scrutiny of stablecoins, and changes to rules or compliance requirements could affect issuance, reserve management and business models.

Circle has emphasized compliance and regular reserve reporting in recent years. Stablecoins are digital tokens designed to maintain a stable value relative to a fiat currency, most commonly the U.S. dollar, and are used to move dollars on-chain and to settle trades and payments.