Shares of Circle fell nearly 20% following reports that new crypto legislation could restrict incentives tied to holding its USDC stablecoin. The CLARITY Act, a proposed bill aimed at regulating digital assets in the United States, would reportedly prohibit offering yield “directly or indirectly” on stablecoin holdings if it resembles interest-bearing accounts. It also applies rules across exchanges and brokers, allows limited activity-based rewards, and directs regulators like the U.S. Securities and Exchange Commission (SEC), Commodity Futures Trading Commission (CFTC), and Treasury to establish a framework within a year. However, some analysts argue that while incentives may face restrictions, Circle still benefits from an early-mover advantage in the stablecoin market.