Circle, Coinbase slide after report new Clarity Act draft prohibits stablecoin yield payments
Shares of stablecoin giant Circle Internet Group CRCL.N and Coinbase Global COIN.O slide 19.8% and 11.1%, respectively
The newest language on stablecoin yield in the Clarity Act won't allow rewards on balances, CoinDesk reports, citing a person familiar with the current draft
The report added the latest version would grant rewards programs on a narrow basis as long as they don't resemble the interest from bank deposits in any way
"The ban likely reduces incentives to hold onto USDC (a payment instrument, not a security) which likely results in temporary lower overall circulation / secondary market liquidity" - Citi analyst Peter Christiansen
Talks on the landmark crypto legislation had hit an impasse earlier this year after banks said they could not back a compromise pushed by the White House
Banks had opposed a provision allowing stablecoin issuers and crypto firms to offer yield-bearing products and other rewards that could lure away bank deposits
As of last close, CRCL up 59.7% and COIN down 11.3%
