Crypto-linked Stocks Sink More Than 10% After Clarity Act Draft Floats Stablecoin Yield Ban

Circle and Coinbase shares slid sharply after a draft of the Clarity Act proposed zero yields on stablecoins, marking the latest effort to narrow the gap between banks and crypto firms. Circle Internet Group Inc., the issuer of USDC, fell 21.25% to $99.73, cutting its market capitalization from above $31 billion to $24.61 billion, according to MarketWatch. Coinbase Global Inc. dropped 11.08% to $178.39, with its market cap declining from $53.3 billion to $47.7 billion. The updated bill draft seeks broader regulatory oversight for the crypto industry. It would prohibit passive interest on stablecoin deposits while allowing "active rewards" tied to using those digital currencies, though the details of what qualifies as active rewards remain unclear. If the bipartisan proposal clears the Senate, stablecoin yield products would face a major overhaul. Coinbase CEO Brian Armstrong has previously warned that such rules would reduce user returns on deposits, even as they could lift Coinbase's short-term profitability by lowering reward payouts. The Clarity Act has remained stalled in the Senate amid lobbying from banks, which argue that stablecoin-based interest creates unfair competition with traditional deposit products. The push has drawn criticism from U.S. President Donald Trump and his son Eric Trump, who say banks are slowing progress on regulatory clarity for crypto. Former SEC Chair Gary Gensler recently echoed the banking industry's concerns, saying stablecoins "undermine the banking system" and could "destabilize" the economy. Banks, at the same time, have been moving further into blockchain-linked products. Many have embraced real-world asset tokenization to support 24/7 trading, fewer intermediaries, shorter settlement times, and fractional ownership for retail investors. JPMorgan Chase, BNY Mellon, and Goldman Sachs are among the firms connecting traditional finance with blockchain. Bank of Montreal (BMO) and CME Group have also announced plans to launch tokenized cash services in late 2026, subject to regulatory approval.