Mizuho: AI agents could expose Circle's reserve income to a downside risk of up to 20%

Mizuho Securities cut the price target for USDC stablecoin issuer Circle Internet Group (CRCL) from $45 to $43 in its latest research report, while maintaining an "Underperform" rating. The bank warned that AI personal assistant engines could pose "significant risks" to Circle’s mid-term revenue. The report noted that with the widespread adoption of AI agents, USDC’s market capitalization could face downward pressure of $4 billion to $9 billion, while Circle’s reserve revenue could see a mid-term decline of 10% to 20%. Mizuho’s simulations showed that AI agents including Muse, when answering the question “Where should funds be held,” tend to recommend users shift money from USDC to higher-yielding fiat alternatives protected by FDIC insurance, such as savings accounts offered by SoFi. Even if users stick to the crypto space, AI agents “appear to prefer other platforms” over holding USDC directly within Circle’s ecosystem. Mizuho further outlined a faster AI adoption scenario: roughly $70 billion could flow to fiat products, and another $20 billion to higher-yielding stablecoins, which would reduce USDC’s market cap by up to $90 billion and cause an 18% drop in Circle’s reserve revenue. The bank also cut its 2027 financial forecasts: it lowered the expected average circulation of USDC from $108 billion to $101 billion, reserve revenue expectations from $43 billion to $41 billion (a roughly 5% decline), and adjusted EBITDA expectations from $635 million to $603 million. The market reacted negatively. According to data from the BIT stock platform, Circle’s stock closed 7% lower at $79.84 in Monday trading, but Mizuho’s new price target implies roughly 46% additional downside.