Circle shares fell 4% on Wednesday after a Wall Street Journal report said more than a dozen banks, including Bank of America, Wells Fargo, and Santander, are considering launching their own stablecoins. This points to a possible shift in the stablecoin market, as banks may stop simply responding to crypto-native issuers like Circle and start building their own regulated distribution networks around tokenized dollars.
For Circle, defending relevance is not just about USDC’s technical position, but about broadening its product offering and deepening network advantages. Earlier this month, Circle said its Arc network is due to launch on public mainnet on September 16, and chief executive Jeremy Allaire said institutions using USDC are expanding rather than piloting. Circle also said LuLu Financial Holdings cut cross-border settlement costs by 25% to 30% using USDC and Circle Mint, while settlement volume grew 40% after the shift to USDC.
The central question now is whether future stablecoin growth goes to regulated banks with customer and deposit channels, or to specialists like Circle with mature product networks. The next checkpoint is whether these bank discussions turn into concrete launches, and whether Circle can keep onboarding payment, settlement, and infrastructure partners fast enough to stay at the centre of the market.