Circle (CRCL) shares remain in focus on Tuesday following reports the stablecoin firm has filed for a national trust bank charter with the Office of the Comptroller of the Currency (OCC).
The filing underscores CRCL’s commitment to integrating stablecoins into the U.S. financial system and – if approved – will enable the company to launch the First National Digital Currency Bank.
Circle stock is currently up a staggering 500% versus its initial public offering (IPO) price.
Why Does a Bank Charter Matter for Circle Stock?
Circle’s reported application for a national trust bank charter is a strategic leap toward regulatory legitimacy – which may prove a major tailwind for its stock price over time.
If approved, the NYSE-listed firm will operate under direct OCC oversight, allowing it to manage USDC reserves in-house and offer institutional-grade custody for tokenized assets like stocks and bonds.
This would help reduce reliance on third-party custodians, including BNY Mellon and BlackRock (BLK), streamlining operations and potentially raising investor confidence in CRCL shares.
Simply put, the aforementioned filing signals Circle’s evolution from crypto-native disruptor to federally regulated financial infrastructure provider – a narrative that the Street is bound to appreciate.
CRCL Shares May Be Egregiously Overvalued
Circle had a blockbuster IPO in early June and global interest in this crypto stock hasn’t waned since.
Still, JPMorgan analysts led by Kenneth Worthington assumed coverage of CRCL shares with an “Underweight” rating this week, saying the valuation on them is “outside our comfort zone.”
Worthington acknowledged the company’s “early-mover advantage” and the outsized opportunity in stablecoin and USDC growth in his research note – but cautioned against buying Circle stock as all of it looks more than priced in already.
JPM is convinced that Circle Internet Group could come crashing down to $80 per share within a year.
Wall Street Is Betting on Further Upside in Circle
Other Wall Street analysts, however, recommend loading up on CRCL stock at current levels since the Senate’s recent approval of “GENIUS Act” could open floodgates of demand for stablecoins.
According to Barchart, the consensus rating on Circle shares currently sits at “Moderate Buy” with the mean target of $220 indicating potential upside nearly 16% from current levels.
