Clarity Act’s impact on Circle could be negative over the long term, Mizuho says

If and when the Clarity Act becomes law, the landmark crypto market structure bill is widely expected to lift all boats across the digital asset industry, but Mizuho analysts argue Circle could be an exception.

"Our view is that CLARITY Act opens the door for even more institutional scale competition for stablecoins, further commoditizing CRCL's USDC," Mizuho analysts led by Dan Dolev wrote in a research note on Wednesday.

Mizuho argues the regulatory certainty provided by the Clarity Act could potentially attract more competition in the stablecoin space as commoditization of the crypto tokens accelerates, eventually eroding Circle (CRCL) revenues.

The analysts have previously said the recently announced Open USD stablecoin poses a significant threat to Circle revenue.

The project is backed by a consortium of more than 140 financial, technology and crypto companies, including Visa, Mastercard, Stripe, BlackRock and Coinbase.