Shares of Circle fell 20% on Tuesday amid dual regulatory and competitive pressures. Rival stablecoin issuer Tether announced an impending audit by a Big Four firm, potentially enhancing its compliance under U.S. legislation. Meanwhile, proposed compromise language in the Clarity Act could impact rules for stablecoin yield, a key feature currently offered by major exchanges like Coinbase and Kraken.
Circle’s stock, CRCL, dropped over 20% to close at $101.24, continuing to slide in after-hours trading. The closely aligned Coinbase also saw its shares fall nearly 10% on the same day.
The decline follows news that stablecoin giant Tether has agreed to a full audit by an unnamed “Big Four” accounting firm. This move could address a significant hurdle for compliance with the U.S. GENIUS Act, potentially making Tether a stronger domestic competitor.
Circle’s share price may also be reacting to developments around the proposed Clarity Act market structure bill. Lawmakers are reviewing compromise language regarding stablecoin yield, with the banking lobby currently assessing the version crafted by Senators Alsobrooks and Tillis and the White House.
Speculation over the draft bill’s potential restrictions on stablecoin yield has spread across social media. “Lots of crypto-side worry rn over the proposed stablecoin yield compromise on market structure,” stated one social media post reviewed for the article.
Exchanges currently offer various rewards for holding USDC. Coinbase offers 3.5% rewards for USDC balances on its premium Coinbase One platform, while Kraken offers up to 5% rewards.
Despite the recent drop, analysts had been optimistic about Circle, with its shares gaining 170% since early February. This surge was driven by a blowout Q4 2025 earnings report showing 72% growth in USDC to $75.3 billion and 77% revenue growth to $770 million.
The company’s earnings prospects had been bolstered by a higher-for-longer interest-rate environment. Circle earns substantial interest on the reserves backing its more than $78 billion worth of USDC tokens in circulation.
