Circle Internet Financial, the issuer of the USDC stablecoin, experienced its worst single-day trading session since going public on Tuesday, with its stock (CRCL) plunging 20%. The dramatic decline is widely attributed to newly introduced language in a draft of the pending Clarity Act that could severely restrict or ban yield generation from stablecoins.
The draft legislation, which tasks the SEC, CFTC, and Treasury with jointly defining permissible rewards within one year, includes language threatening to ban stablecoin yield "directly or indirectly," including anything "economically or functionally equivalent to interest." This represents a significant potential threat to Circle's revenue model, as it shares USDC reserve income with its major partner, Coinbase. Coinbase stock (COIN) fell 10% on the news, with stablecoin revenue constituting roughly 20% of its total Q3 2025 revenue.
Industry reaction to the draft text has been mixed. One leader called it "a departure" from prior White House discussions, while another termed it "the best possible result." The draft notably preserves activity-based rewards tied to user behavior while targeting passive yield.
In a related and strategically timed development, Tether announced it has finally signed with a Big Four accounting firm for its first-ever full independent audit of USDT reserves. This move comes after more than a decade of promises and reliance on attestations from firms like BDO. Tether, which claims $192 billion in assets backing USDT, is signaling intent to comply with the GENIUS Act—a law signed last summer requiring foreign stablecoin issuers to undergo rigorous reserve audits. A clean audit would significantly close the credibility gap between USDT and its main competitor, USDC, at a moment when USDC's yield model faces regulatory uncertainty.
In other regulatory news, CFTC Chairman Michael Selig announced the creation of a new Innovation Task Force. This dedicated team will develop regulatory frameworks for crypto, artificial intelligence, and prediction markets, aiming to "future-proof" regulation and establish "clear rules of the road."
Market-wise, Bernstein analysts published a note reiterating a $150,000 Bitcoin price target for 2026, stating BTC has likely bottomed. They highlighted MicroStrategy's (MSTR) use of a dividend-paying preferred share (STRC) to fund over $1.5 billion in Bitcoin purchases this month without diluting common shareholders.
