Circle Internet Group’s stock has shed roughly a quarter of its value over the past week. It opened March 24 near $126, crashed 20% to close at $101, then slid to end the week at $93.
The drop followed two pieces of bad news landing the same day: a Senate draft bill that could ban the returns Circle distributes to stablecoin holders, and rival Tether announcing it hired a major accounting firm to audit its reserves.
Analysts say the decline reflects deep uncertainty about Circle's business model, not just a market overreaction. Passive yield is a primary reason retail users hold USDC. A ban would force Circle to build an entirely new user engagement structure based on activity-based rewards, a costly transition that could take at least a year.
Tether's audit poses a separate competitive risk. Analysts estimate a successful sign-off could put 5 to 15% of USDC's institutional market share at risk near-term.
Consensus around the proposed yield ban makes it virtually impossible for stablecoin issuers to adopt a traditional bank-like model, capping Circle's structural upside. However, analysts note Circle's strength lies in its deep integration with institutional finance and the broader B2B ecosystem, with sufficient runway to absorb regulatory uncertainty.