Bernstein: The CLARITY Act yield compromise clause will strengthen Circle's competitive advantage

Mars Finance News, Bernstein stated in a recent research report that the latest compromise plan for stablecoin yields in the U.S. CLARITY Act is structurally favorable to Circle and the USDC ecosystem. The report says that the current version of the bill prohibits stablecoin issuers from paying interest that has the same economic effect as bank deposits to passive holders, but allows reward mechanisms related to real transactions, payments, and usage to continue. Bernstein believes this means that the current model where Circle relies on partners like Coinbase to offer USDC reward programs will gain regulatory approval, while also limiting the industry’s space to compete for market share through high yields. Bernstein pointed out that the bill effectively reinforces the classification of stablecoins as “payment tools” rather than “deposit substitutes,” which helps protect Circle’s current business model that depends on reserve income. It continues to give Circle a “beat the market” rating and a target price of $190. Data shows that the total global supply of USD stablecoins has exceeded $300 billion, with USDT and USDC accounting for about 97% of the market share. Bernstein said that USDC’s share in on-chain payments and wallet transfers is steadily increasing, with its payment share in the AI Agent Payment Protocol x402 exceeding 99%. Additionally, Bernstein mentioned that Circle’s launched ARC chain has completed 244 million testnet transactions, and its ARC token pre-sale previously raised $222 million, with investors including a16z crypto, Apollo Funds, ARK Invest, and BlackRock. However, the report also notes that the CLARITY Act still needs to complete several legislative procedures before it can officially take effect, including a full Senate vote of 60 votes and coordination with the House version. Polymarket currently predicts a roughly 62% chance of it passing in 2026.