Circle, on the eve of announcing its first-quarter earnings, highlights anticipation for 'AI agent payments'

Stablecoin issuer Circle Internet Group will announce its first-quarter earnings before the U.S. stock market opens on Monday, with market focus shifting from traditional cryptocurrency trading demand to the potential of AI-based payment applications.

According to Barron’s, analyst expectations from FactSet indicate that Circle’s first-quarter earnings per share (EPS) are 19 cents. This is lower than the 43 cents in the previous quarter and the 30 cents in the same period last year. Revenue is expected to be $715 million, up from $579 million in the same period last year.

Circle’s stock has risen about 40% so far this year, trading around $111. However, it remains significantly below the high of $298.99 reached after its initial public offering (IPO) in June last year.

Circle is the issuer of the dollar-pegged stablecoin USDC. USDC maintains its value based on reserve assets such as U.S. Treasury bonds. Circle shares interest income related to USDC through a structure in partnership with Coinbase Global. Previously, stablecoins were mainly used as trading tools for purchasing Bitcoin and other cryptocurrencies, so their growth largely depended on activity in crypto trading.

However, as the recent cryptocurrency trading market slows down, Circle’s investment appeal is being reassessed from a new perspective. The core focus is on AI agent payments. AI agents refer to software capable of autonomously conducting research, planning, and even executing based on user instructions. In the future, if these agents can automatically handle small payments, data purchases, service fee payments, etc., blockchain stablecoins with fast settlement and low transaction fees could become a means of payment between machines, and this expectation is gaining momentum.

The blockchain networks where USDC circulates can provide high-speed payments and low costs, making them suitable for very small transactions. Some investors are therefore paying attention to the possibility of reevaluating Circle, viewing it not just as a crypto trading benefit stock but as an AI infrastructure payment company.

However, the slowdown in existing revenue bases in the short term poses pressure. Robinhood Markets stated in April that its cryptocurrency trading revenue in the first quarter decreased by 47% year-over-year. This indicates that the traditional use of stablecoins—the cryptocurrency trading market—remains sluggish.

Regulatory risk is also a variable. The U.S. Congress is discussing legislation to regulate cryptocurrency trading, but due to conflicts between the banking sector and the crypto industry, votes in key committees have been delayed. One point of contention is whether to allow interest payments on stablecoin deposits. The banking sector believes crypto accounts could drain existing bank deposits and thus seeks restrictions on paying interest to stablecoin holders. If such regulations tighten, the attractiveness of USDC holdings could be weakened.

Among the 27 analysts tracked by FactSet, 13 have given Circle stock a “buy” rating, and 2 have issued a “sell” rating. Market expectations are that, in this earnings release, investors will not only focus on revenue growth trends but also confirm USDC circulation volume, interest income structure, business strategies related to AI agent payments, and regulatory responses.