Citigroup Sees Interest Payment Restrictions as Headwind for Circle

Citigroup has evaluated the potential effects of the U.S. crypto market structure bill's interest payment restrictions on Circle, the issuer of the USDC stablecoin.

According to analysts, these restrictions could lead to a temporary decline in Circle's liquidity and circulating supply due to reduced incentives for holding the stablecoin. Additionally, secondary-market liquidity may also decrease as a result.

Citigroup has assigned a 'high risk' rating to Circle shares and set a target price of $243, but notes that this does not pose a fundamental threat to its investment appeal.