USDT

Circle’s USD Coin (USDC) faces a significant sell-off due to the proposed Clarity Act, which may restrict stablecoin yield. This legislation, aimed at regulating stablecoins, has caused Circle’s stock to plummet 20% and impacted its distribution partner, Coinbase. The act seeks to prohibit stablecoin issuers from paying customers for holding assets, a key incentive for users, addressing concerns from traditional banks about fund migration. Meanwhile, rival Tether is undergoing its first full audit of USDT reserves amidst increased regulatory scrutiny.

Tether is reportedly exploring a capital raise of $15-$20 billion through private placement, potentially valuing the stablecoin giant at $500 billion. This move would place Tether among the world’s most valuable private companies, rivaling OpenAI and SpaceX. The company aims to use the capital to diversify reserves, enhance transparency, and solidify its market dominance amid increasing regulatory scrutiny and competition. This comes as Tether expands its presence in the U.S. with a new stablecoin, USAT, targeting institutional clients. The outcome could reshape the stablecoin market.