Legislators are weighing restrictions on stablecoin yields, including those on USDC, as part of the Clarity Act. The latest draft would bar platforms from offering yields on stablecoin holdings in a manner akin to bank deposits, though it would permit activity-based rewards.
The impact is most acute for Circle and Coinbase. Coinbase customers currently enjoy a 3.5% yield on their stablecoin holdings, so removing that yield would be significant and could reduce demand for stablecoins. The regulatory shift is also sending a negative signal to investors, with Coinbase stock moving lower on expectations that the broader crypto sector would face tighter oversight.
Indications from Circle’s side show a similar sensitivity to the bill’s provisions. Shares of Circle Internet Group declined as reports surfaced that U.S. legislation could limit yield offerings on stablecoins. While the Act may not abruptly threaten Circle’s business, the disincentive to hold stablecoins could dampen transaction activity and weigh on sentiment around Circle’s UDC ecosystem. If the measure advances, a broader stock sell-off could ensue, a development investors are watching closely as the final form of the bill remains uncertain.
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