Circle Shares Decline 15% After Record High Amid BIS Stablecoin Concerns
Shares of Circle (CRCL), the stablecoin issuer, fell 15% on Tuesday after reaching a record high of $299, marking a total decline of about 25% from that peak. Current trading stands at $223, over 600% higher than its IPO price this month.
- Analysts indicated concerns over Circle's valuation compared to competitors.
- Ark Invest has sold more than $300 million in Circle shares since its IPO.
- The Bank for International Settlements expressed doubts about stablecoins, stating they pose risks to financial stability and monetary sovereignty without regulation.
- The BIS suggested that stablecoins may have a subsidiary role in the financial system if properly regulated.
- Despite these concerns, the stablecoin sector continues to grow, with $4 trillion in transaction volume reported in the last 30 days.
- Circle is the issuer of USDC, the second-largest stablecoin with a supply of $61 billion, following Tether's USDT at $156 billion.
Circle recently launched a payments and remittances network aimed at competing with traditional payment systems like Mastercard and Visa.