Mizuho: The Clarity Act May Harm Circle in the Long Term by Intensifying Stablecoin Competition

ChainCatcher report: Mizuho analysts say that if the U.S. Crypto Market Structure Act, known as the Clarity Act, is passed, while it may generally benefit the digital assets industry, the long-term impact on Circle could be negative. The reasoning is that regulatory clarity will attract more large institutional players into the stablecoin market, further accelerating the commoditization of stablecoins and eroding Circle’s revenue potential from USDC. Mizuho believes Circle’s primary recent pressure comes from Open USD—a stablecoin project backed by a coalition of over 140 financial, technology, and crypto companies, including Visa, Mastercard, Stripe, BlackRock, and Coinbase. Unlike Circle’s model, which retains approximately 38% of USDC reserve earnings, Open USD employs a “pass-through” model, allocating nearly all reserve earnings to distributors while retaining only minimal management fees. Analysts also note that Coinbase, as the largest distributor of USDC and a supporter of Open USD, may gain stronger negotiating power when renegotiating revenue-sharing agreements with Circle in the future. The distribution agreement between the two parties could be renegotiated as early as next month.