economy
Circle heads for its worst day on record as proposed law could limit stablecoin yield
Earning yield, usually in the form of rewards, on stablecoins like Circle's USDC and others is key incentive for users to hold the coins.
TL;DR
- Circle's stock fell 19%, its steepest decline ever, following news of a proposed bill potentially limiting stablecoin yields.
- The bill could ban stablecoin issuers from paying yield to customers for simply holding assets, removing a primary user incentive.
- Coinbase, a major distribution platform for USDC, also saw its shares drop 9%.
- Tether, the largest stablecoin issuer, announced it has hired an unnamed Big Four accounting firm for its first audit of USDT reserves.
- Circle's USDC is considered more institutional-grade due to annual audits by Deloitte and monthly attestations.