Circle (USDC) Stock Crashes 18% After New Clarity Act Draft Targets Stablecoin Rewards

Shares of Circle, the issuer of the USDC stablecoin, plummeted by 18% following the release of a new draft of the Clarity for Payment Stablecoins Act. The proposed legislation poses a significant threat to the business model of stablecoin issuers by potentially banning or severely restricting rewards and interest-bearing features on stablecoin holdings. This regulatory move has sparked a sharp sell-off in Circle's stock (CRCL), as investors fear the impact on user adoption and revenue streams. Market analysts highlight that the draft bill could reshape the entire stablecoin landscape in the United States, favoring more restrictive structures. The news has also contributed to heightened volatility in the broader cryptocurrency market, with traders assessing the implications for other major stablecoins like Tether (USDT) and DAI.