Citi: Stablecoin reward limits may hinder USDC expansion, but do not change Circle's fundamentals.

Citibank stated that the restrictions on stablecoin reward mechanisms in the draft US CLARITY Act may pose a temporary obstacle to Circle (CRCL), but will not shake its long-term investment logic. Analysts pointed out that the policy is more likely to affect the pace of expansion than a fundamental threat. The bill proposes to restrict stablecoin yields similar to deposit interest but allows incentive mechanisms related to transactions or payments. Since Circle itself does not directly pay yields to USDC holders, but instead distributes reserve yields to channel partners such as Coinbase, its core revenue model will not be directly impacted. Citibank believes that reduced rewards may weaken users' short-term incentive to hold USDC, thereby affecting the circulating supply and secondary market liquidity, but the key metric for stablecoin adoption remains transaction and payment volume, not the circulating supply itself. Previously, Circle's stock price fell by about 20% due to policy uncertainty. However, institutions including Bernstein believe that the market may have misinterpreted the policy impact; the regulatory focus is on restricting platforms that distribute yields to users (such as Coinbase), rather than Circle's reserve yield model. (CoinDesk)