CIRCLE: Initiating coverage - The Internet Dollar network for the next decade

We initiate on Circle (CRCL) with an Outperform rating (PT $230). CRCL is building a market-leading digital dollar stablecoin network, with a strong regulatory edge, liquidity headstart and marquee distribution partnerships, which is hard to replicate in our view. We view CRCL as an investor must-hold to participate in the new internet-scale financial system built for the next decade: we expect stablecoins to evolve from the money-rail of crypto markets to the money-rail of the internet, with total industry stablecoin supply reaching ~$4Tn over the next decade vs. ~$225Bn today. USDC would be the largest regulated stablecoin under the GENIUS Act, giving CRCL a regulatory headstart and making USDC the preferred partner for internet platforms beyond crypto exchanges; its $61Bn liquidity is hard to build without the crypto distribution flywheel. We see USDC capturing ~30% share of this $4Tn market in a decade. We value CRCL using a 10-year DCF;