USDC supply rebound gives Circle a new growth case as Bernstein turns constructive

Circle is back in the spotlight for a reason that matters more to RWA and stablecoin infrastructure than short-term stock volatility: USDC is growing again. Bernstein told clients this week that the stablecoin issuer may be entering a new expansion cycle, keeping an Outperform rating on Circle and a $140 price target after USDC supply added roughly $2 billion in the span of seven days. For public-market investors that is an equity call, but for onchain finance builders the more important point is what sits underneath it. If the digital-dollar base is reaccelerating, the surrounding rails for settlement, collateral and tokenized capital markets usually strengthen with it.

The core of Bernstein’s argument is that USDC is no longer relying on a single crypto-trading use case to justify growth. The firm tied its outlook to a broader mix of demand drivers: a friendlier US policy backdrop for dollar-backed stablecoins, deeper activity in tokenized markets, higher crypto transaction volumes and a widening role for stablecoins in payments. That is a materially different setup from the periods when stablecoin narratives were driven mainly by exchange balances and speculative trading cycles. In RWA terms, it suggests that the addressable market for compliant digital cash is broadening into the same workflows that support tokenized funds, treasury products and cross-border settlement.

Circle’s own second-quarter results give that thesis some operating support. The company reported $73.3 billion of USDC in circulation at quarter-end, up 19% from a year earlier, while Q2 onchain USDC transaction volume reached $14.8 trillion, a 151% year-over-year increase. Total revenue and reserve income came in at $701 million and net income from continuing operations was $48 million. Those numbers do not prove that the next year will look like Bernstein expects, but they do show that Circle is generating larger throughput across the network even before any full-blown stablecoin mania has returned.

The other reason this matters is transaction quality, not only headline supply. USDC is still smaller than Tether’s USDT on total circulating value, yet Bernstein argued that USDC has been taking a larger slice of adjusted stablecoin throughput over the past year and now accounts for a clear majority of that activity in 2026. For tokenized-finance operators, that can matter more than raw market-cap rank. A dollar token that increasingly handles economically meaningful flow is more likely to become preferred collateral, settlement cash and treasury infrastructure for institutions that care about redemption mechanics, auditability and regulatory posture.

Circle has spent the last year leaning into exactly those trust markers. On its public USDC materials, the company says the token is fully backed by highly liquid cash and cash-equivalent reserves and redeemable one-for-one for US dollars. It also continues to publish reserve attestations and reserve-composition disclosures, with much of the reserve base tied to cash deposits and short-duration government money market exposure through the Circle Reserve Fund structure. That transparency does not eliminate policy or concentration risk, but it does help explain why USDC remains central to tokenized-market designs that need a cleaner compliance and reporting story than offshore alternatives can usually offer.

The distribution story is also widening. Circle says USDC is available across more than 35 blockchains and accessible through hundreds of millions of wallet endpoints, while its latest quarterly update pointed to rising activity in the Circle Payments Network and new institutional integrations around custody, minting and redemption. That combination matters because the next wave of RWA products is unlikely to live on one chain or inside one venue. Issuers, exchanges, brokers and fintechs need a dollar instrument that can move between trading, settlement and payments contexts without constant bridge or redemption friction. A stablecoin that is simultaneously liquid, redeemable and widely distributed has an easier path into those workflows.

None of this means Bernstein’s target is guaranteed to play out. Circle is still exposed to interest-rate sensitivity, crypto market cyclicality and the possibility that stablecoin regulation evolves in ways that compress margins or raise operating burdens. Competition is also intensifying from both incumbent stablecoins and new bank-linked or exchange-linked dollar products. But the call is notable because it frames Circle less as a momentum stock and more as a listed proxy for whether regulated digital dollars are becoming core financial infrastructure.

That is the angle worth watching from here. If USDC keeps expanding while transaction share, reserve transparency and institutional integrations all improve at the same time, Circle’s equity story becomes a downstream expression of a larger RWA thesis: tokenized markets scale better when the cash leg is trusted, portable and always on. Bernstein may have put the headline price target on the story, but the bigger signal is that stablecoin growth is once again being measured through real network usage rather than narrative alone.