Circle Internet pullback due to CLARITY Act reports, says Morgan Stanley

Morgan Stanley analyst James Faucette attributes yesterday’s roughly 20% pullback in shares of Circle Internet (CRCL) to reports from various sources suggesting that the current circulating version of the CLARITY Act does not allow for payment of yield nor rewards to stablecoin holders for simply holding a stablecoin after a meeting between Senate Banking and crypto industry leaders on Monday. The firm attributes the negative reaction in shares to previously-building expectations that the White House would push a compromise more favorable to the crypto industry that would permit holding-based interest/rewards payments, notes the analyst, who believes the core potential of Circle lies in future use cases which are “nascent in monetization.” The firm keeps an Equal Weight rating and $80 price target on Circle shares.