stablecoin issuer circle Stocks are falling as the latest version of the bill, known as the Transparency Act, indicates it could limit yields on stablecoin balances.
Shares fell 20% on Tuesday, the worst day in stock history. The sharpest drop so far occurred on June 27, when the stock fell 15.5%. This move also hindered coinbaseUSDC’s primary distribution platform. The stock price fell nearly 10%.
The yield earned on stablecoins such as Circle’s USDC, usually in the form of rewards, is a key incentive for users to hold the coin, similar to the interest earned on cash in a bank account. The latest bill would prohibit stablecoin issuers from paying customers yield just for holding the assets.
However, the bill could allow for “activity-based rewards,” such as using stablecoins for payments, trading, and lending.
Interest in stablecoins is a growing problem for the cryptocurrency industry. Banks argue that if crypto apps like Coinbase offer that, customers could potentially divert cash from banks.
Separately, Circle’s competitor Tether announced it had hired an unnamed Big Four accounting firm to audit the company. USDT I am making a reservation for the first time.
According to CryptoQuant, USDT is the largest stablecoin on the market with a market capitalization of $184 billion. However, Tether has been embroiled in controversy for years because, while promising transparency through quarterly “certifications,” it has never provided a full formal audit. This caused many investors and regulators to worry that USDT’s reserves were either too opaque or did not meet auditing standards.
Circle skyrocketed in popularity last year following its successful IPO. USDC The coin is widely viewed as having a higher institutional grade than Tether, as it is fully audited annually by Deloitte and also issues monthly certificates. USDC is the second largest stablecoin with a market capitalization of $78.6 billion.
—CNBC’s Nick Wells contributed reporting.
