Circle Stock Price Plunges 20% Over Revenue Ban, New Regulations May Create Regulatory Moat for USDC

Gate News, March 24 — Circle Internet Group (CRCL) stock plummeted by approximately 20%, losing $4.6 billion in market value. The cause was the draft of the “Digital Asset Market Transparency Act” (Clarity Act), which bans platforms from offering passive yields on stablecoins to users. This news triggered panic among investors, while Tether announced it would undergo audits by the Big Four accounting firms, and 16 USDC corporate wallets were frozen, increasing market uncertainty.

The Clarity Act explicitly prohibits platforms, exchanges, and brokers from paying yields to stablecoin holders but allows trading or governance-related rewards. The SEC, CFTC, and Treasury have 12 months to develop anti-avoidance rules. Previously, 96% of Circle’s revenue came from USDC reserve interest, and the bill does not target this income, meaning Circle can still retain its core revenue source. Analyst Simon Dedic noted that the bill effectively creates a regulatory moat for Circle, helping to solidify its business model.

The market reacted strongly. Mizuho Securities analyst Dan Dolev said that in the short term, the ban could limit Circle’s application scenarios, and COIN’s stock price also dropped about 10% due to reduced stablecoin-related income. However, in the long run, the ban removes excessive investor expectations for passive yields, which could help stabilize USDC’s centralized operation model.

Meanwhile, Tether CFO Simon McWilliams stated that the company has signed with the Big Four accounting firms for a comprehensive independent audit covering assets, liabilities, and internal controls, further enhancing market transparency. This highlights Circle’s transparency advantage in the market. On-chain investigator ZachXBT reported that Circle froze 16 hot wallets involving funds from exchanges, casinos, and foreign exchange companies, indicating that USDC’s risk management measures are being strengthened.

The Clarity Act has not yet taken effect. The Senate Banking Committee is expected to review it in late April, and DeFi protocols are also adjusting reward mechanisms to comply. The market performance of USDC after removing passive yields will determine whether this stock price fluctuation is a short-term reaction or the beginning of a long-term adjustment.