An analysis said a “yield compromise” provision in the CLARITY bill being discussed in the U.S. Senate could work in favor of USDC issuer Circle’s business model.

On May 19 local time, blockchain outlets CoinPost and The Block reported that U.S. investment bank Bernstein pointed to the provision as potentially limiting interest-rate competition among stablecoin issuers and protecting Circle’s earnings structure.

The issue is how stablecoin holders are compensated. An amendment approved by the Senate Banking Committee on May 14 by a 15-9 vote bans paying interest that is effectively the same as bank deposits on stablecoin balances that users are simply holding. It is designed to allow rewards linked to transaction, payment or service-use performance.

Bernstein assessed that this structure is favorable to Circle. It said Circle operates performance-based rewards programs through partners such as Coinbase, rather than providing a direct yield on USDC balances themselves. Bernstein said it believed this model could fall within what the bill allows.

The key is blocking rate competition. Bernstein said the provision would make it harder to expand market share through interest-rate competition. It said that if low-liquidity issuers are restricted from attracting customers by offering higher rewards, Circle would find it easier to maintain investment returns generated from USDC reserve assets.

The market is also growing rapidly. As of May 18, total supply of dollar-pegged stablecoins topped $300 billion for the first time. Tether’s USDT maintains the largest share, followed by USDC. In a structure where the two account for about 97 percent of total supply, rules limiting rate competition could have more room to work in favor of the top players.

Whether the bill will ultimately pass remains uncertain. Passing the full Senate requires 60 votes, and follow-on legislative procedures would still remain. Prediction market Polymarket put the chance of passage this year at 62 percent, while TD Cowen estimated 40 percent. Democratic Senator Ruben Gallego has previously said he would vote against it unless an “ethics provision” addressing conflicts of interest in cryptocurrency holdings by public officials is resolved.

Views also differ on the timing of a Senate vote. Crypto exchange Gemini said the Senate would move to a floor vote within 30 days, but Eleanor Terrett said it was possible but not confirmed and cited competition for scheduling with other bills as a variable.

As a result, whether the yield provision will actually give Circle an institutional advantage is expected to take shape only after a floor vote and subsequent legislative procedures. Still, as the stablecoin market is being reshaped around large issuers, regulatory standards for compensation methods are emerging as a key variable that will determine future competitive dynamics among issuers.