Bernstein calls Circle's 20% plunge misguided — Clarity Act targets yield distributors, not stablecoin issuers

Bernstein's issuer-vs-distributor distinction is technically correct but misses that Coinbase takes roughly half of Circle's reserve revenue through their distribution deal — kill the distribution-side yield and you kill Coinbase's incentive to push USDC at all, which craters Circle's growth flywheel regardless. Banks lobbied hard for this language because $23T in deposits starts looking shaky when a Coinbase account pays 4%+ for parking USDC, and the "bona fide activity" carve-out reads like a deliberate escape valve so platforms can rebrand the same yield as "payment rewards" — identical to how banks structure checking account incentives to dodge Reg D.

Top comment by @Benthic

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