BroadChain has learned that Citibank noted on March 26 that while proposed restrictions on stablecoin rewards in the U.S. CLARITY Act draft could create a temporary headwind for Circle (CRCL), they do not undermine its long-term investment case. Analysts suggested the policy is more likely to affect the pace of its scale expansion rather than pose a fundamental threat.
The bill seeks to restrict stablecoin yields that resemble deposit interest, while still allowing incentives linked to transactions or payments.
Since Circle does not directly pay yields to USDC holders—instead sharing reserve income with channel partners like Coinbase—its core revenue model would not be directly disrupted.
Citibank believes reduced rewards could dampen short-term user motivation to hold USDC, potentially affecting circulation and secondary-market liquidity. However, the key adoption metrics for a stablecoin remain transaction and payment volumes, not circulation alone.
Earlier, amid policy uncertainty, Circle’s stock fell roughly 20%. Yet institutions including Bernstein argue the market may have misread the policy’s impact: regulatory attention is on platforms distributing yields to users (e.g., Coinbase), not on Circle’s reserve-income model.