Circle shares slip as US banks press Senate to tighten CLARITY Act wording
Circle Internet Group (CRCL) fell more than 2% in pre-market trading after a coalition of US banking groups urged Senate leaders to tighten stablecoin language in the CLARITY Act. In a joint letter, the banks asked lawmakers to revise Section 404 before advancing the bill, warning that its current wording could open a loophole allowing stablecoin issuers to offer interest-like incentives that pull customer deposits out of traditional banks and into tokens such as USDC.
The banks flagged particular risk to community and regional lenders, saying vague language around yield-related incentives could accelerate deposit flight. “Ensuring that stablecoin regulations draw clear and enforceable boundaries around interest- and yield-like incentives is therefore essential,” the letter said.
Political backdrop and bill prospects
The renewed lobbying comes days after President Trump urged Congress to pass the CLARITY Act in honor of Senator Lindsey Graham, who died on July 12. But momentum for the bill appears shaky: a report earlier this month said a key White House adviser backing the legislation is on a one-month leave, cutting the estimated probability of passage to about 37%. A Senate floor vote is still expected before lawmakers’ August 7 recess.
Market reaction and technical picture
Circle’s stock has continued to slide from its June peak near $140, trading around $61 in recent sessions—just above a major Fibonacci support level at $59.39. Analysts note that a decisive break below that level would leave scant chart support until the psychologically important $50 mark.
Momentum indicators point to sustained selling pressure: the Chaikin Money Flow sits near -0.39, signaling capital outflows, while the Average Directional Index (ADX) is around 24.7, implying the downtrend retains moderate strength. Any recovery attempt would likely meet resistance at successive Fibonacci retracements near $76.63, $90.17, $99.67, $109.18 and $120.94.
Longer-term fundamentals and analyst moves
Despite the near-term pressure, several developments support Circle’s longer-term thesis. The firm recently secured a national trust bank charter from the Office of the Comptroller of the Currency, enabling it to operate as a federally regulated trust bank. Institutional interest also showed up: ARK Invest bought roughly $13.8 million of CRCL shares on July 9.
Still, sentiment among some analysts has become more cautious. Baird cut its price target on Circle from $138 to $100, citing expectations that Circle’s Q2 2026 revenue will miss Wall Street estimates and warning that the June 30 launch of the OUSD stablecoin could chip away at USDC’s market share over time. Baird, however, noted that Circle’s alignment with the proposed GENIUS Act could ultimately strengthen USDC adoption as the regulatory framework for dollar-backed stablecoins evolves.
Separately, Baird and BTIG trimmed target prices for Circle and Coinbase ahead of Q2 earnings but maintained bullish ratings on both names.
Bottom line: fresh regulatory pushback on the CLARITY Act and technical weakness are weighing on CRCL in the near term, but charter approval and institutional buying provide offsetting, longer-term support—leaving the stock sensitive to both policy developments and broader market sentiment.
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