Mizuho: The Clarity Act could be a long-term negative for Circle, with stablecoin competition intensifying

PANews July 23, citing The Block, said that Mizuho analysts noted that if the Clarity Act is passed, in the long run it could bring more institutional-level competition into the stablecoin market, accelerate the commoditization of stablecoins, and ultimately erode Circle’s USDC revenue. Analyst Dan Dolev pointed out that the regulatory certainty created by the bill would attract more competing players into the space. Previously, Mizuho had downgraded Circle’s rating due to the Open USD stablecoin project.

Mizuho also said that Coinbase, as the largest distributor of USDC, may gain more leverage in the next round of revenue-sharing negotiations with Circle because it has already supported Open USD. The two parties’ distribution agreements could be renegotiated as soon as next month. Mizuho maintained a $50 target price for Circle. Circle’s stock traded at about $67 on Wednesday, down roughly 6% on the day.