Circle (NYSE:CRCL) has gained a potential long-term advantage after lawmakers advanced the Clarity Act, according to Bernstein.

Bernstein analysts said the compromise language in the bill effectively blocks a "yield arms race" where stablecoin issuers compete by offering higher interest rates to attract deposits.

That distinction matters for Circle because the company does not directly pay passive yield on USDC holdings. Instead, partners like Coinbase Global Inc (NASDAQ:COIN) use distribution agreements and activity-based rewards tied to (CRYPTO: USDC) usage.

Bernstein maintained outperform ratings on Circle and Coinbase, with targets of $190 and $330, respectively, The Block reported.

Stablecoin Supply Hits Record High

The bullish call comes as stablecoin adoption continues accelerating.

According to Bernstein and The Block data, total dollar-backed stablecoin supply surpassed $300 billion. Tether's (CRYPTO: USDT) and USDC control roughly 97% of the market.

Adjusted stablecoin transaction volume reached around $15 trillion monthly and annualized stablecoin volume is tracking near $100 trillion, up from roughly $55 trillion last year

USDC's market share in adjusted transaction volumes reportedly climbed from 41% to 60% year-over-year, helped by growth in spot trading and wallet-to-wallet transfers.

AI Payments Becoming A Major Bull Case

Bernstein also pointed to Circle's growing "agentic payments" infrastructure as a major long-term catalyst.

The firm highlighted gas-free USDC transfers, multichain programmable wallets, AI agent payment rails and the x402 protocol enabling software-to-software stablecoin payments.

Bernstein also highlighted Circle's ARC blockchain, which uses USDC as native gas and features what the firm described as "quantum-ready" architecture.

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