Mizuho Warns Clarity Act Could Erode Circle's USDC Revenue Long-Term

According to Mizuho analysts led by Dan Dolev, the Clarity Act could negatively impact Circle over the long term by attracting increased competition in the stablecoin market. Mizuho argues that regulatory certainty from the Clarity Act will commoditize USDC, eroding Circle's revenues as competitors enter the space.

The analysts cited Open USD, backed by over 140 companies including Visa, Mastercard, Stripe and Coinbase, as a significant threat. Unlike Circle, which retains approximately 38% of USDC's reserve income, Open USD uses a "pass-through" model that routes nearly all yield to distributors. Mizuho warned that Coinbase, USDC's largest distributor, could gain leverage in future negotiations with Circle due to its Open USD endorsement, with renegotiations potentially occurring as soon as next month.