Circle stocks fall as US banks challenge CLARITY law loopholes

Shares of Circle Internet Group fell more than 2% in pre-market trading, putting fresh pressure on the stock after a group of U.S. banks asked the Senate to tighten the stablecoin provisions in the Clarity Act.

According to a joint letter from several U.S. banking organizations, the groups urged Senate majority and minority leaders to amend Section 404 of the Clarity Act before lawmakers move forward with the bill.

Banks argue that the current language could allow stablecoin issuers to offer incentives such as interest to encourage customers to move funds from traditional bank deposits to stablecoins like Circle. $USDC.

The letter warns that unclear language regarding yield-related incentives could increase deposit flight, particularly from regional and local banks.

“It is therefore essential that stablecoin regulations draw clear and enforceable boundaries around incentives such as interest and yield.”

The new lobbying effort comes days after President Donald Trump called on Congress to pass the Clarity Act in honor of Sen. Lindsey Graham, who died on July 12. However, crypto.news previously reported that a key White House adviser supporting the bill took a month-long vacation, weakening the bill’s chances of passing the Senate.

The report added that while a vote in the full Senate chamber is still expected before lawmakers go into recess on Aug. 7, the probability of passage has dropped to 37%.

Selling pressure keeps Circle stock near key support zone

Circle’s stock continues to languish amid renewed political uncertainty, widening its decline after falling sharply from June’s highs of around $140.

According to the daily chart, CRCL is trading around $61, just above the key Fibonacci support level at $59.39. This area has become an important line for buyers, and a decisive break below it would leave little chart support before the psychologically important $50 level.

Momentum indicators also continue to favor sellers. Chaikin Money Flow remains near -0.39, indicating continued capital outflow from equities, while the average directional index is around 24.7, suggesting that the existing downtrend remains moderately strong.

Even if buyers manage to stabilize the decline, any recovery attempt is likely to face resistance at consecutive Fibonacci retracement levels around $76.63, $90.17, $99.67, $109.18, and $120.94, making a rebound technically difficult unless market sentiment improves.

Despite long-term growth drivers, analyst opinion remains divided

Despite the recent weakness, several trends continue to support Circle’s long-term outlook.

Circle recently received a National Trust Bank License from the Office of the Comptroller of the Currency, allowing the company to operate a federally regulated trust bank. Separately, ARK Invest purchased approximately $13.8 million worth of CRCL stock on July 9, demonstrating the investment firm’s continued confidence even though the stock price is well below recent highs.

At the same time, Baird is taking a more cautious stance. The investment bank lowered Circle’s price target to $100 from $138, citing expectations that the company’s second-quarter 2026 earnings will fall below Wall Street expectations.

Baird also warned that the launch of the OUSD stablecoin on June 30th could erode Circle’s share of the stablecoin market over time, weighing on demand for CRCL stock in the future. Still, the company believes that Circle’s compliance with the GENIUS Act $USDC As the regulatory framework for dollar-backed stablecoins evolves.