Circle falls 20% as stablecoin reward limits loom, Tether adds Big Four auditor and wallets frozen
Circle's stock dropped 20% due to potential stablecoin reward restrictions, while Tether announced a full audit and Circle froze multiple wallets.Summary
Circle's shares experienced a 20% decline on Tuesday following news of draft legislation that could limit USDC rewards. The proposed Clarity Act may ban yield payments for holding stablecoins and restrict incentive structures. This comes as banks push to prevent stablecoins from competing with traditional deposits. Meanwhile, Tether, Circle’s main competitor, announced it is engaging a Big Four accounting firm for its first full financial audit, potentially eroding Circle’s advantage as a transparent stablecoin issuer. Additionally, blockchain analysis revealed Circle froze the USDC balances of 16 hot wallets linked to various businesses, reportedly due to an ongoing U.S. civil case. Coinbase, which offers USDC rewards, also saw a nearly 10% share decline, as ~20% of its revenue is tied to USDC rewards.
(Source：The Block)