CLARITY Act draft banning interest-like stablecoin yields sends Coinbase and Circle shares tumbling

Shares of Coinbase (COIN) declined roughly 8% after a draft of the CLARITY Act was published that would prohibit platforms from generating yield on stablecoin deposits by banning compensation structures “economically equivalent to interest” on dormant stablecoin accounts ^{[1] [2]}.

Circle Internet Group (CRCL) shares fell sharply—reports put the drop near 18–20%—as the proposed restrictions raised concerns about USDC’s growth outlook and ended a prior rally for the stock ^{[3] [2] [4]}.

The draft would allow activity‑based rewards tied to customer loyalty or promotions but would bar yield that functions like traditional bank deposits, a shift observers say could reshape how stablecoins compete for capital and how distribution partners such as Coinbase operate ^{[2] [5]}.

Market reactions to the CLARITY Act draft were swift, with major exchange and issuer stocks falling as analysts and investors price in tighter limits on how stablecoins can be used to generate yield ^{[1] [3] [2]}.