Shares of Circle Internet Group (CRCL) experienced a significant decline of nearly 10% on Thursday, closing at $76.60. This drop follows the U.S. Senate Banking Committee”s decision to postpone discussions regarding the Digital Asset Market Clarity Act, an essential piece of legislation for the cryptocurrency sector.
The delay has stirred uncertainty in the market, particularly as it coincides with Coinbase CEO Brian Armstrong”s withdrawal of support for the bill. Armstrong expressed concerns that the current text may impose excessive restrictions on rewards related to dollar-pegged stablecoins, suggesting that it might be preferable to not enact legislation than to approve a flawed version.
This regulatory indecision has sent shockwaves through the cryptocurrency market, affecting not only Circle”s stock but also impacting the shares of related companies. Coinbase (COIN) saw its stock fall by 6.5%, while Robinhood (HOOD) dropped 7.8%. Additionally, Bitcoin experienced a slight decrease of 0.9%, underscoring how legislative uncertainties can influence the broader digital asset ecosystem.
At the center of this debate is Circle”s USDC stablecoin, which is pegged to the U.S. dollar and generates revenue through interest and dividends from its reserve accounts. Any potential restrictions on how rewards are structured could adversely affect Circle”s revenue model, prompting caution among investors as they await final legislation.
Industry analysts have noted that the discussions surrounding the Clarity Act have evolved beyond merely defining “rewards” to encompass wider regulatory questions about stablecoin oversight. Summer Mersinger, CEO of the Blockchain Association, critiqued the bill”s current trajectory, indicating it has been influenced by pressures from large banking institutions aiming to diminish stablecoin incentives.
Despite the regulatory environment remaining uncertain, traditional financial entities are actively exploring stablecoin applications. Notably, Visa has initiated a pilot program that incorporates stablecoin settlements into its existing payments infrastructure, allowing select U.S. banks to transact using Circle”s USDC. Cuy Sheffield, Visa”s crypto chief, mentioned an annualized run rate of $4.5 billion for stablecoin-based transactions, highlighting the growing interest in digital assets from traditional finance.
Circle”s initial public offering (IPO) debut took place in June 2025, setting its share price at $31. Since then, the stock has frequently mirrored changes in policy and market sentiment. With new legislative text expected by January 21 and a committee markup anticipated on January 27, investors are closely observing developments in Washington for insights on stablecoin regulation.
The stock”s responsiveness to interest rate fluctuations and regulatory actions highlights the challenges faced by dedicated stablecoin issuers such as Circle. Analysts suggest that while the long-term outlook remains positive, short-term volatility is likely to continue until clearer legislative guidelines are established.
