I've just noticed some interesting developments in the stablecoin sector these days. Circle's CRCL stock price plummeted 20% on Tuesday, seemingly because of a new crypto law that restricts stablecoin yields, but some analysts have proposed a more intriguing perspective — that this could actually be beneficial for Circle in the long run.

The core issue lies in the current distribution model. Coinbase earns a significant portion of revenue from USDC, the dollar-pegged stablecoin issued by Circle, through agreements with Circle. It’s estimated that Circle pays Coinbase over $900 million annually, accounting for about half of Circle’s total revenue. If the new law truly eliminates yield rewards on account balances, Coinbase’s highly profitable business segment would shrink. By August 2026, when the two companies renegotiate, Circle’s bargaining power will be much stronger.

Interestingly, the market seems to have overreacted. Many investors point out that the demand for stablecoins mainly comes from their practical use in payments and settlements, not from yield returns. Most stablecoins don’t pay interest but are still widely used. From this perspective, restricting yields doesn’t fundamentally change the core utility of stablecoins. Moreover, market forecasts suggest that by the end of this decade, the stablecoin market could grow to between $1.9 trillion and $4 trillion. As a leading player in regulated stablecoins, if more activity shifts toward compliant participants, Circle could actually be the biggest beneficiary.

Some analysts believe CRCL’s stock price could double, with a target valuation around $75 billion, roughly twice its current value. Improving the regulatory framework might even help Circle enhance profit margins, as less revenue would be shared with partners, leaving more for itself.

Another risk event worth noting is the situation with World Liberty Financial. WLFI tokens recently hit a new low since their launch in 2025, with a 24-hour drop of 13.5%. This project uses its governance tokens as collateral to borrow stablecoins, and has cleared the USD1 liquidity pool on the Dolomite platform. The problem is, when WLFI’s price falls, the collateral shrinks, reducing borrowing capacity and creating a vicious cycle. This high concentration of tokens and the deep risk loop pose significant hidden dangers for other depositors on the platform.