TLDR Tech / Crypto
CLARITY Act Yield Compromise Cements Circle's Edge
Markets are misreading the CLARITY Act's stablecoin yield compromise by conflating who earns yield with who distributes it. Circle earns reserve income, Coinbase distributes it to users, and the legislation targets distributors, not issuers. The compromise, struck by Senators Tillis and Alsobrooks, bars yield payments economically equivalent to bank deposits while allowing "bona fide activities," which Bernstein sees as protecting Circle's ~$2.6B in estimated 2025 reserve income. Circle shares jumped nearly 20% on the news, while Bernstein reiterates that the selloff that preceded the compromise was overdone. The analysis lands against a backdrop of record stablecoin supply, with USDC transaction volume approaching $12T in Q4 2025 alone.
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