Circle Internet Group Inc., the issuer of the US dollar-backed stablecoin USDC, saw its stock fall more than 20% in a single session, marking its largest intraday decline since listing. Investors cited concerns over a draft U.S. regulation known as the Clarity Bill that could curb rewards programs offered to stablecoin holders, a feature that had underpinned USDC’s appeal. Market sentiment also soured across crypto-linked equities, with Coinbase down about 11%, and Marathon Digital, Galaxy Digital, and Robinhood all lower as Bitcoin traded around $68,906.
Analysts view the Clarity bill as a watershed for the broader stablecoin sector, with the potential to constrain incentives that have fueled USDC’s growth. Industry observers, including Bloomberg, warned that limiting rewards could dampen holders’ demand relative to bank deposits and dent USDC’s growth trajectory. Some see the law’s language as potentially reducing or eliminating the roughly 3.5% annual rewards that some USDC holders receive.
Separately, Tether announced a deal with Big Four auditors to conduct its first full audit, fueling speculation that the largest stablecoin issuer could broaden its U.S. footprint. Circle shares had surged last year on hopes for the Genius Act passing, but gains have since retraced amid price volatility, competition, and regulatory concerns. Analysts say the sector remains heavily regulated, and the current pullback could be a short-term shock rather than a signal of longer-term weakness.
Leave a Reply