Circle's stock price once fell 18% after the US Clarity Act draft proposed to restrict stablecoin rewards.

On Tuesday morning in U.S. trading, shares of USDC issuer Circle (CRCL) fell as much as 18%, while crypto platform Coinbase (COIN) fell about 8%. CoinDesk reported that the latest draft of the U.S. Clarity Act proposes to restrict stablecoin balance rewards, including prohibiting rewards for passive stablecoin balances and banning structures that are "economically equivalent to interest." Mizuho analyst Dan Dolev stated that the draft may prohibit payments of yield solely for holding stablecoins and restrict any practices that make the scheme equivalent to a bank deposit in any way. The report mentions that the GENIUS Act previously prohibited issuers from directly paying yields to users, but issuers and platforms arranged rewards through methods such as the distribution of reserve asset yields; Circle, for example, earns interest on USDC-backed assets and shares this with Coinbase, which then uses this interest to reward users. Keyrock digital asset researcher Amir Hajian stated that the latest draft of the Clarity Act, by prohibiting arrangements that are "economically equivalent to interest," points to the aforementioned "yield penetration" model. Furthermore, Tether, the issuer of USDT, stated that it has hired one of the "Big Four" accounting firms to conduct a full audit of its USDT reserves. The report also points out that this decline occurred after Circle's stock price had surged 170% since early February, and Clear Street analyst Owen Lau suggests the market reaction may be excessive; market participants are also pricing in interest rate hike expectations. (CoinDesk)