Coinbase and Circle entered Wednesday facing a second major policy event in two days after their shares fell roughly 10% following the Senate’s failure to advance the CLARITY Act.
Coinbase closed Tuesday down 10.1% at $172.11, while Circle dropped 11.5% to $86.25. Reuters separately described both declines as roughly 9% as the broader crypto market sold off following the 49-50 Senate procedural vote, which left CLARITY short of the 60 votes required to advance.
Now attention shifts from Congress to the Federal Reserve. The Federal Open Market Committee concludes its September 15-16 meeting Wednesday, with its policy statement scheduled for 2 p.m. Eastern Time and Chair Kevin Warsh’s press conference at 2:30 p.m.
Markets expect a 25-basis-point increase, which would lift the federal funds target range from 3.50%-3.75% to 3.75%-4.00%. The move would be the Fed’s first rate increase in more than three years.
Why Rates Matter Directly to Circle and Coinbase
Unlike most crypto companies, higher interest rates can directly increase an important revenue stream for both Circle and Coinbase.
Circle backs USDC primarily with cash and short-duration U.S. government securities and earns interest on those reserves. It generated $668 million of reserve income during the second quarter of 2026, up from $634 million a year earlier.
But USDC growth masked the effect of lower rates. Circle disclosed that a 66-basis-point decline in average reserve yields reduced second-quarter reserve income by approximately $113.9 million compared with the prior-year period. Across the first six months of 2026, lower yields reduced reserve income by approximately $220 million.
Coinbase participates in those economics through its commercial agreement with Circle. Coinbase receives allocations linked to USDC held on its platform and half of remaining income generated from broader USDC circulation after specified deductions and third-party payments.
Coinbase likewise disclosed that lower average interest rates reduced stablecoin revenue by $55.9 million in the second quarter and $113.4 million during the first half of 2026.
From Regulatory Shock to Rate Decision
Tuesday’s losses therefore reflected one policy risk while Wednesday’s Fed meeting addresses another.
CLARITY would have established a more durable statutory framework dividing digital-asset oversight between the SEC and CFTC. Its failure leaves crypto companies relying more heavily on regulators acting through existing authority.
The Fed decision instead affects stablecoin economics mechanically.
Circle explicitly warns investors that falling rates reduce reserve returns and therefore reserve income, while rising rates increase reserve returns. The ultimate impact also depends heavily on USDC circulation and distribution costs.
That means a quarter-point hike would generally improve the yield environment for USDC reserves, all else equal, although the eventual earnings effect depends on how quickly portfolio yields reset and whether circulating USDC continues growing.
For Coinbase and Circle investors, Washington is consequently delivering two different policy tests within roughly 24 hours: Congress has delayed the regulatory framework the crypto industry wanted, while the Federal Reserve is about to determine the interest-rate backdrop supporting one of the sector’s largest recurring revenue streams.