CRCL Stock Price Slips as Banking Groups Warn CLARITY Act Still Leaves Stablecoin Loopholes

Circle (NYSE: CRCL) stock price is down by 2.22% today, July 14, during pre-market trading. This drop comes as the American Bankers Association warns that passing the CLARITY Act in its current state risks causing deposit flight from small banks as customers chase the yields that are paid on stablecoins.

The pushback by banks comes after President Trump urged Congress to pass the CLARITY bill in honor of Senator Lindsey Graham, who passed on July 12.

US Banking Groups Want Tighter Stablecoin Rules in CLARITY Act

US banking groups have sent a joint letter to the majority and minority leaders of the US Senate, asking them to push for changes in Section 404 of the CLARITY Act.

The banks say that the current language used in this section is too ambiguous, and it could encourage people to move away from making deposits with banks to holding stablecoins like CRCL’s USDC so that they can generate yield.

“Ensuring that stablecoin regulations draw clear and enforceable boundaries around interest- and yield-like incentives is therefore essential,” the letter said.

The banks say Congress should close the loopholes in this section before passing the bill, a move that could push CRCL stock down.

CoinGape earlier reported that the Senate could hold a floor vote on the CLARITY Act in July 2026 before senators break for recess on August 7.

Still, the odds of the CLARITY Act passing have dropped to a new low of 37% after the main White House adviser who was pushing for the bill to pass went on a one-month leave.

CRCL Stock Price Risks Steeper Fall if Key Support Breaks

The price of the CRCL crypto stock has dropped to the support of $62. This stock has tested this support five times since June 30, with each drop being followed by a recovery.

If history rhymes and the price bounces again from this support like it has done before, CRCL could move to the 23.6% Fib level of $67

But the CMF reading of -0.42 warns that there is more selling pressure than buying pressure. This suggests that CRCL stock could fall to the lower Bollinger band of $57.

The widening Bollinger band also suggests that the price of Circle shares might become more volatile. If volatility increases during the current downtrend, CRCL could drop to the February low of $49.

Still, CRCL stock is not short of bullish narratives after Circle secured an OCC bank charter allowing it to operate a national trust bank.

ARK Invest also purchased $13.8 million worth of CRCL shares on July 9, suggesting that the fund manager remains bullish on the stock despite the recent drop.

Baird Trims CRCL Stock Target to $100, Warns of Revenue Drop

Baird has reduced its target price for CRCL stock from $138 to $100. The investment bank also warns that Circle’s revenues for Q2 2026 will be lower than Wall Street estimates.

The firm acknowledged that the OUSD stablecoin that launched on June 30 could weaken Circle’s market share in the stablecoin market, and this could reduce demand for CRCL stock.

Still, Baird notes that Circle’s compliance with the GENIUS Act could increase the adoption of its stablecoin, and this could bode well for CRCL stock.