Bernstein Says CLARITY Act Blocks Stablecoin Yield Race

TLDR

• Clarity Act may protect Circle as stablecoin yield competition fades
• Bernstein says Clarity Act blocks rivals from chasing USDC with yield
• Circle gains policy edge as Clarity Act limits passive stablecoin rewards
• Clarity Act keeps USDC rewards alive while blocking deposit-like yields
• Bernstein sees Circle winning as Clarity Act ends stablecoin rate race

The Clarity Act has shifted the stablecoin debate toward Circle, as Bernstein said the bill blocks rivals from using passive yield to win market share. Bernstein analysts said the Clarity Act yield compromise gives Circle Internet Group a structural advantage. The bill bars stablecoin issuers from paying interest that acts like bank deposit yield. It still allows rewards tied to trading, payments, and other active usage.

The Senate Banking Committee advanced the Clarity Act in a 15-9 vote on May 14. The markup cleared a major step for the U.S. crypto market structure bill.  The compromise language reduced concerns about a rate-driven battle among stablecoin issuers.

Bernstein said the Clarity Act supports USDC because Circle does not directly pay passive yield. Instead, partners such as Coinbase use distribution deals and activity-linked rewards. Therefore, the bill protects USDC’s current growth model without treating it like a deposit product.

USDC Gains as Yield Race Slows

Stablecoin supply has now passed $300 billion, with Tether and USDC controlling most of the market. Adjusted monthly stablecoin volume has reached about $15 trillion. Consequently, annualized flows now stand near $100 trillion across payment and trading channels.

USDC has also gained share in adjusted transaction volume over the past year. Bernstein said its share rose from 41% to 60% year-over-year. Besides, the Clarity Act may help preserve that trend by limiting rate-based competition from newer issuers.

Circle also continues to build payment infrastructure around USDC. Bernstein pointed to gas-free transfers, x402, and the ARC blockchain as part of that strategy. ARC uses USDC as native gas, which further links Circle’s network plans to stablecoin usage.

Bill Moves Toward Senate Floor Vote

The Clarity Act now moves toward a full Senate vote that requires 60 votes. After that, the House must reconcile any differences before final approval. The bill would then need President Trump’s signature to become law.

Bernstein kept an Outperform rating on Circle and set a $190 price target. That target implies strong upside from Circle’s $114 closing price on Friday. The firm also maintained an Outperform rating on Coinbase with a $330 target.

The Clarity Act background remains important because stablecoins sit between crypto markets and payment systems. Lawmakers want issuers to support payments without copying bank deposits. Hence, Bernstein said the Clarity Act cements stablecoins as payment tools, not deposit substitutes.

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