CLARITY Act Bullish for Circle Despite Down 20% Daily

The circle already keeps the yield generated in USDC reserves, which means that the proposed rule will simply cover what the company already does.

Circle Internet Group, which issues USDC, the world’s second largest stablecoin, saw $4.6 billion wiped from its market on March 24 when its CRCL stock fell nearly 20%, closing at around $101 after opening the session above $126.

The trigger was a draft revision of the CLARITY Act that sought to prevent crypto platforms from transferring stablecoin yields to their customers.

The Sell-Off May Have Went Ahead of Reality

As we reported yesterday, the latest CLARITY Act proposal prohibits digital asset firms from offering yields on stablecoins, directly or indirectly. However, it still allows rewards based on user activity, such as loyalty programs, promotional offers, or subscription benefits, as long as US regulators work together to determine what counts as acceptable rewards.

CRCL started the day’s trading at just over $126, then rose to $127 before news of the draft revision emerged. It then sank to around $98.31, according to Google Financials data, the recovery attempt was unsuccessful as the stock managed to climb to $101 before the end of the session.

Following a one-day dip of 20%, many market observers argued that the sell-off may have breached policy. One of them, the founder of MoonRock Capital Simon Dedic, wrote in a post on X that the decline looks like a “news selling” event. He noted that insiders had been holding off on the advance during the six-week meeting when CRCL saw it move from around $50 to around $133.

According to him, the CLARITY Act, without harming the Circle, actually gives the company a control channel to maintain its existing model. He pointed out that Circle’s revenue structure is designed to keep the yield generated on USDC reserves, and under the new rules, it can keep that model while pointing to the rule as the reason it can’t pass the yield on to users. Dedic called the setup a “big bearish Circle,” and described CRCL’s price drop as a potential entry point for long-term investors.

Growth expert Jose Fabrega made a similar point, saying:

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“The USDC has never paid you the first crop. The round will have the same profit and still have a lot of potential to grow.”

He added that DeFi protocols and real-world asset platforms could be the biggest beneficiaries of the rule change, as yield-hungry money will now need to flow through those channels instead of sitting in stablecoin accounts. However, such developments would indirectly increase the demand for USDC.

Stablecoins Shifting Toward Utility

The broader picture of stablecoins is similarly gauged. On-chain data cited by XWIN Research Japan shows that active stablecoin addresses are at a high level, pointing to growing real-world usage. If clear federal rules finally come, that adoption process can continue.

The charge made by analysts is that stablecoins, deprived of their fruitful function, have turned into something like a financial infrastructure, useful for payments, payments, and securities, instead of investment products.