CRCL, COIN news: Circle, Coinbase tumbles as regulators move to ban interest on stablecoins

Circle's stock plunged 18% and Coinbase fell 8% following the release of a new draft of the Clarity Act, which proposes restrictions on yield offered on stablecoin balances. Analysts suggest this could eliminate a key incentive for holding stablecoins like USDC, hindering their development as a store of value. The draft targets the 'pass-through' model where issuers share revenue with platforms like Coinbase to fund user rewards, effectively banning anything “economically equivalent to interest.” Meanwhile, Tether announced it has hired a 'Big Four' accounting firm to conduct a full audit of its reserves, potentially improving its standing with institutional investors and impacting USDC’s market share. Despite the recent strong performance of Circle’s stock, the negative news triggered a sharp sell-off, though some analysts believe the market reaction was an overreaction.

(Source：CoinDesk)