Diamond Predicts CLARITY Act Will Boost Circle and Hyperliquid

The CLARITY Act is expected to pass by the end of 2026, according to Bob Diamond, former Barclays CEO and current head of Atlas Merchant Capital. The act's regulatory framework around stablecoin yields will significantly impact markets, particularly for Circle, the company behind the USDC stablecoin.

Diamond's firm has existing investments in digital payment infrastructure, including exposure to Circle. He estimates that the CLARITY Act will pass with a 50-75% chance by the end of 2026. The act's most consequential provision is the regulatory framework it creates around stablecoin yields, which will tell issuers and platforms exactly what they can and cannot do.

Circle's stock surged nearly 20% in early May 2026 following the announcement of CLARITY Act rule compromises. This suggests that investors are already anticipating the benefits of a formal regulatory framework for stablecoins. The company sits at the center of compliant infrastructure, with USDC being the dominant stablecoin in institutional and DeFi settings where compliance matters.

Hyperv Liquid's partnership with Coinbase to integrate USDC as its canonical stablecoin is also notable. This deal provides USDC's compliance credibility and creates alignment between the two companies at the network level. However, there are risks associated with timeline and competitive pressures in the on-chain perpetuals and spot trading space.