--- title: "Mizuho Warns AI Personal Assistants Could Erode Circle Reserve Revenue" description: "The bank retained an Underperform rating on Circle, projecting a potential $4 billion to $9 billion contraction in USDC market value." url: https://basisdesk.news/news/mizuho-warns-ai-agents-threaten-circle-usdc-revenue published: 2026-10-28T01:16:48.661Z modified: 2026-10-28T01:16:48.661Z section: Stablecoins & Payments author: Basis Desk Newsroom (AI-generated, source-verified) sentiment: bearish tickers: [USDC] tags: [circle, usdc, mizuho, stablecoins, ai-agents, reserves] license: Quote with attribution to Basis Desk (basisdesk.news). Not financial advice. --- # Mizuho Warns AI Personal Assistants Could Erode Circle Reserve Revenue The bank retained an Underperform rating on Circle, projecting a potential $4 billion to $9 billion contraction in USDC market value. ## At a glance - **What happened:** Mizuho reiterated an Underperform rating on Circle, warning that AI personal assistants could shift user cash away from USDC. - **Why it matters:** The migration could strip $4 billion to $9 billion from USDC's market value, cutting Circle's reserve revenue by 10% to 20%. - **Who is affected:** Circle Internet Group, USDC holders, and equity investors. - **What's next:** Circle reports third-quarter financial results on Nov. 4 before markets open. - **Primary source:** [Mizuho Holds "Underperform" Rating on Circle, Says AI Agents Could Hurt USDC Revenue](https://coincodex.com/article/94394/mizuho-holds-underperform-rating-on-circle-says-ai-agents-could-hurt-usdc-revenue) — coincodex.com ## Key points - Mizuho maintained an Underperform rating on Circle, citing risks from AI personal assistants advising users to exit USDC [1][2]. - The bank projected a potential $4 billion to $9 billion decrease in USDC circulation, threatening a 10% to 20% hit to reserve revenue [1][2]. - Circle derived 95.2% of its second-quarter revenue from interest on reserve assets, with Q3 earnings scheduled for Nov. 4 [1][2]. ## Editorial remark - **Context:** Circle built its primary revenue stream on yields from U.S. Treasuries and bank cash backing USDC, which generated 95.2% of its second-quarter top-line revenue. - **Impact:** Circle and equity holders face compressed reserve earnings if algorithmic assistants steer retail and institutional capital into FDIC-insured deposit accounts. - **Watch:** Circle reports third-quarter financial results on Nov. 4 before U.S. market open, with market focus on circulation balances and interest margins. Investment bank Mizuho reiterated an Underperform rating on Circle Internet Group (CRCL) on Oct. 26, warning that consumer-facing artificial intelligence agents pose a structural challenge to its stablecoin revenue model [1][2]. The bank's simulation tested how AI personal assistants, such as Meta's Muse, handle inquiries regarding optimal cash management [1][2]. According to the research note, the tested software directed users toward higher-yielding fiat accounts backed by the Federal Deposit Insurance Corporation (FDIC) rather than maintaining balances in $USDC [1][2]. Mizuho projected that accelerated AI agent adoption could prompt an outflow of $4 billion to $9 billion from USDC's circulation over the medium term [1][2]. Under this scenario, the bank modeled approximately $7 billion shifting into traditional banking products and $2 billion moving into competing, yield-bearing stablecoins [1]. Such an outflow would result in a 10% to 20% decline in Circle's reserve income, the yield generated from the short-term U.S. Treasuries and cash reserves backing the digital asset [1][2]. As of the second quarter, 17% of USDC was held directly on Circle's platform earning zero customer yield, while Coinbase held 30% and other venues held 53% [1]. ## Exposure to Interest-Bearing Reserves The analyst warnings underscore Circle's direct sensitivity to total circulating supply. The company generated 95.2% of its second-quarter revenue from interest accrued on reserve assets [1]. Circle reported $1.4 billion in top-line revenue across the first half of 2026, retaining roughly $0.07 in net profit per dollar earned as USDC settled over $36 trillion in cumulative on-chain volume during that window [1]. Circulation stood at roughly $73 billion on Oct. 8, down slightly from $73.3 billion on June 30 [1]. Broader macroeconomic research has raised similar friction points regarding deposit substitution. A Bank for International Settlements working paper noted that commercial banks retain leverage over digital asset adoption velocity through adjustments to retail deposit yields [2]. Despite earlier gains under European regulatory frameworks, where [USDC Surpasses Tether in Euro Trading Volume Following MiCA Shift](https://basisdesk.news/news/usdc-overtakes-usdt-euro-trading-mica-kaiko) following its qualification as a significant asset under MiCA, domestic yield competition remains a factor [1]. Circle is scheduled to release its third-quarter financial results on Nov. 4 before U.S. markets open [1][2]. ## Sources 1. [Mizuho Holds "Underperform" Rating on Circle, Says AI Agents Could Hurt USDC Revenue](https://coincodex.com/article/94394/mizuho-holds-underperform-rating-on-circle-says-ai-agents-could-hurt-usdc-revenue) — coincodex.com, 2026-10-27 2. [CRCL Stock In Spotlight After Mizuho Cuts Circle’s Price Target, Warns AI Agents Could Hurt USDC Demand](https://stocktwits.com/news-articles/markets/equity/crcl-stock-in-spotlight-after-mizuho-cuts-circle-s-price-target-warns-ai-agents-could-hurt-usdc-demand/cZU32kDRByq) — stocktwits.com, 2026-10-26 --- Basis Desk Newsroom · AI-generated, source-verified · https://basisdesk.news/about/how-we-use-ai