Senate draft seeks to ban stablecoin yields; Circle stock drops 22%

Circle stock drops 22% to $98. A Senate draft moves to ban stablecoin yield.

Journalist Eleanor Terrett reported that a revised CLARITY Act draft from the Senate Banking Committee would ban platforms from offering yield “directly or indirectly” on stablecoins or bank‑like assets on X.

The language targets exchanges, brokers, and affiliates to close workarounds. It also bans anything “economically or functionally equivalent” to interest per the draft.

This hits Circle’s model. CNBC reports Circle earns about 96% of revenue from interest on USDC reserves via CNBC.

If platforms cannot offer yield, demand for USDC could weaken. That risks Circle’s core revenue per CNBC.

Pressure spread to exchanges. Coinbase fell ~21% to $179 during the selloff per CNBC.

A rival made a move. Tether hired a Big Four auditor for its USDT reserves for the first time, calling it a step toward “deep assurance that USDT is fully backed, highly liquid, and operated with world‑class risk management” CNBC.

Terrett noted this announcement may have amplified Circle’s drop on X.