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Circle Internet Financial, the issuer behind the USDC stablecoin — the second-largest dollar-pegged cryptocurrency — saw its stock, CRCL, tumble 22% on Tuesday to $98 as lawmakers reportedly moved to tighten rules around stablecoin yields.
The selloff followed reports that a revised draft of the Senate Banking Committee’s CLARITY Act would broadly prohibit platforms from offering yield “directly or indirectly” for holding stablecoins or assets that function like bank deposits.
Circle Revenue Model At Risk?
The proposed restriction, reported by Crypto in America journalist Eleanor Terrett, is written to cover digital-asset service providers and their affiliates — exchanges, brokers, and similar firms — in an effort to close potential workarounds.
Under the draft language, firms would be barred from providing anything “economically or functionally equivalent” to interest on stablecoin holdings.
If they were to materialize over the long term, the implications for Circle would be immediate and substantial. Circle derives approximately 96% of its revenue from interest earned on USDC reserve assets.
If platforms are prevented from offering yield or if demand for USDC softens because consumers and institutions cannot earn returns, Circle’s core revenue stream could be materially weakened.
The fallout was not limited to Circle. Coinbase (COIN), the largest US-listed crypto exchange, also experienced significant pressure, trading down roughly 21% to about $179 at the time of writing.
Tether’s Big‑Four Audit Move
In a Tuesday post on the social media platform X, Terrett also pointed out that Tether’s latest move may have amplified the crash in Circle’s stock. Circle’s competitor recently announced that it had hired a Big Four accounting firm to audit its USDT reserves for the first time.
Tether framed the engagement as a major step toward enhanced transparency and regulatory readiness, saying the audit would provide “deep assurance that USDT is fully backed, highly liquid, and operated with world-class risk management.”
Featured image from OpenArt, chart from TradingView.com
