Bernstein: CLARITY Act Yield Compromise Will Strengthen Circle's Competitive Advantage
Odaily Odaily reports that Bernstein, in its latest research report, stated that the recently reached stablecoin yield compromise under the US CLARITY Act is structurally beneficial for Circle and the USDC ecosystem.
The report notes that the current version of the bill prohibits stablecoin issuers from paying interest to passive holders that is "economically equivalent" to bank deposits, but allows reward mechanisms related to actual transactions, payments, and usage behavior to continue. Bernstein believes this means that Circle's current model, which relies on partners like Coinbase to provide USDC reward programs, will gain regulatory recognition, while also limiting the space for the industry to compete for market share through high yields.
Bernstein points out that the bill effectively reinforces the stablecoin's positioning as a "payment tool" rather than a "deposit substitute," helping to protect Circle's current business model that relies on reserve income. It continues to give Circle an "outperform" rating and a $190 price target.
Data shows that the total global supply of dollar stablecoins has exceeded $300 billion, with USDT and USDC combined accounting for approximately 97% of the market share. Bernstein states that USDC's share in on-chain payments and wallet transfers is continuously increasing, and its payment share in the AI Agent payment protocol x402 has exceeded 99%.
Additionally, Bernstein mentioned that Circle's launched ARC chain has completed a cumulative 244 million testnet transactions. Its ARC token pre-sale previously raised $222 million, with investors including institutions such as a16z crypto, Apollo Funds, ARK Invest, and BlackRock.
However, the report also points out that the CLARITY Act still needs to complete several legislative procedures before taking effect, including a 60-vote threshold in the full Senate and coordination with the House version. Polymarket currently estimates its probability of passing in 2026 at approximately 62%. (The Block)
