TechFlow News, March 26: According to a CoinDesk report, the draft U.S. “Clarity for Stablecoins Act” proposes banning interest payments on passive stablecoin balances. The news triggered market concerns, causing Circle’s (CRCL) stock to plunge approximately 20% on Tuesday.
In response, Citigroup analyst Peter Christiansen and his team issued a report stating that such restrictions may exert short-term pressure on USDC circulation but will not directly impact Circle’s core revenue—since Circle has already transferred most of its reserve income to distribution partners such as Coinbase and does not pay interest directly to token holders. Citigroup maintains its “High Risk” rating on Circle’s stock, with a target price of $243.
Meanwhile, Wall Street firm Bernstein views the recent sell-off as stemming from market misinterpretation. Analyst Gautam Chhugani and his team point out that investors conflated the concepts of “interest recipients” and “interest distributors.” The bill specifically targets Coinbase’s USDC yield product offering roughly 3.5% returns—not Circle itself. Circle’s reserve income for fiscal year 2025 reached $2.64 billion, and its business model remains unaffected. Bernstein assigns Circle an “Outperform” rating, with a target price of $190.
