Bernstein Circle call cements CLARITY edge

Bernstein Circle analysts said the CLARITY Act yield compromise blocks rival stablecoin issuers from competing on rates

Bernstein analysts said the CLARITY Act’s yield compromise structurally favors Circle Internet Group, ending what they described as a looming stablecoin “interest rate arms race.” The note landed days after the bill cleared the Senate Banking Committee 15-9.

The compromise prohibits stablecoin issuers from paying yield economically equivalent to bank deposits, while preserving rewards tied to trading and payments. Bernstein argued the language protects USDC’s growth model.

Stablecoin supply tops $300 billion

Total dollar-backed stablecoin supply surpassed $300 billion this week, with Tether and USDC controlling roughly 97% of the market. Adjusted monthly transaction volume reached around $15 trillion, putting annualized flows near $100 trillion.

USDC’s market share in adjusted transaction volumes climbed from 41% to 60% year-over-year. Bernstein analysts led by Gautam Chhugani wrote that the compromise “cements stablecoins as payment instruments rather than deposit substitutes.”

Circle ARC blockchain reinforces thesis

Bernstein also highlighted Circle’s growing agentic payments infrastructure, including gas-free USDC transfers, the x402 protocol, and the ARC blockchain. ARC uses USDC as native gas under what the firm called “quantum-ready” architecture.

The bank maintained an Outperform rating and $190 price target on Circle, implying roughly 67% upside from its $114 close on Friday. Bernstein also kept an Outperform call on Coinbase with a $330 target.

Circle does not pay passive yield on USDC directly. Partners such as Coinbase instead use distribution arrangements and activity-linked rewards programs tied to USDC usage, structures the CLARITY Act compromise leaves intact.

The CLARITY Act now heads to a full Senate floor vote that requires 60 votes. The House must reconcile any differences before the bill reaches President Trump’s desk for signature.