Circle leans on banking charter and Arc blockchain as CRCL stock falls 76%
Circle's president says USDC's network effects and a new bank charter justify patience, as CRCL trades near record lows and stablecoin rivalry intensifies.
Circle President Heath Tarbert has mounted a public defence of the stablecoin issuer’s strategy after its shares fell 76% from their 2025 peak, arguing that a purpose-built blockchain, a fresh banking charter and USDC’s entrenched market position will eventually reward shareholders who have endured one of the steepest declines among recently listed crypto firms.
CRCL has fallen from roughly $260 in June 2025 to around $62 by mid-July 2026, according to figures cited in Tarbert’s presentation. The slide has coincided with intensifying competition around USDC globally, pressuring investor confidence in Circle’s growth narrative even as the underlying stablecoin remains one of the largest by circulation.
Arc blockchain draws institutional backers
Central to Tarbert’s case is Arc, a layer-1 blockchain designed specifically for stablecoin settlement and on-chain finance, whose public testnet launched on 28 October 2025. In May 2026, a presale of Arc’s native token raised $222 million at a fully diluted valuation of $3 billion, with backers reported to include BlackRock and Apollo.
The logic, as Tarbert framed it, is that USDC currently generates revenue mainly from interest earned on the reserves backing the token. Arc is intended to provide a second commercial engine, an ecosystem in which USDC operates as the native currency and Circle can capture transaction fees directly, rather than relying solely on reserve yield that fluctuates with interest rates.
A regulatory moat, not just a technical one
Tarbert also pointed to a new banking charter as evidence that Circle’s regulatory positioning is deepening rather than eroding, arguing that USDC’s network effects — its distribution across exchanges, wallets and payment rails — represent a moat that rivals cannot replicate quickly. For a company whose valuation now hinges heavily on regulatory credibility, that framing is deliberate: Circle is one of the few large stablecoin issuers operating under both US oversight and, via its MiCA-compliant EMI licensing in the European Union, a formal European regulatory perimeter.
That dual positioning matters for UK and European institutions watching the stablecoin sector, where regulatory clarity — or its absence — increasingly determines which issuers banks and payment firms are willing to integrate. Circle’s push to widen its charter footprint in the US comes as European supervisors continue to scrutinise the systemic implications of dollar-denominated stablecoins circulating inside the bloc.
Why the stock rout is a governance and disclosure story
A 76% decline in a listed stablecoin issuer’s equity, even as the underlying token it issues retains its peg and circulation, illustrates a divergence that regulators and analysts are likely to scrutinise: investor sentiment towards the corporate vehicle can move sharply out of step with the health of the asset it manages. For European regulators assessing systemic risk from stablecoins under frameworks such as MiCA, that distinction between issuer solvency, corporate equity value and token stability is becoming central to supervisory thinking.
Tarbert’s remarks amount to a bet that infrastructure investment — Arc’s blockchain layer, expanded banking permissions, and continued USDC distribution — will eventually be reflected in Circle’s share price, even as near-term competitive pressure on the stablecoin itself continues to weigh on sentiment.
Read more: US regulators miss GENIUS Act deadline, leaving stablecoin rulebook incomplete
