Prime Highlights:
- Coinbase shares jumped more than 16% following the Senate’s passage of a landmark bill that would regulate stablecoins.
- Circle shares climbed almost 34%, indicating increasing investor optimism about the future of USDC.
Key Facts:
- The U.S. Senate voted overwhelmingly in favor of the GENIUS Act with bipartisan support, 68–30.
- The bill is now headed to the House, where it will likely be consolidated with the STABLE Act before being signed by a president.
Key Background
The U.S. Senate has formally passed the bipartisan “GENIUS Act,” another milestone for the crypto community and for the future of stablecoins. The bill mandates an explicit federal framework for dollar-backed stablecoin issuance and activity such as USDC. It mandates one-to-one asset backing, monthly reserve reports to the public, anti-money laundering (AML) compliance, and limits issuance to insured banks or qualified financial institutions.
Passage of the bill results in a prompt market reaction. Coinbase, which assisted in the creation of the USDC stablecoin with Circle, rose 11–17%—its highest-performing S&P 500 stock of the day. Coinbase will gain a lot from the new stablecoin regulations, especially since it already earns a 50% commission on revenue from Circle’s USDC reserves. Coinbase has only rolled out “Coinbase Payments,” unifying USDC payments with platforms like Shopify—demonstrating its willingness to divert trade across crypto rails.
At the same time, Circle’s public shares jumped more than 30%, closing at almost $190 from its $31 IPO of a few weeks ago. Such a rare ~544% valuation surge puts Circle on the center stage of the stablecoin revolution. CEO Jeremy Allaire reacted to the bill, which he called “historic” and an unqualified indication of the U.S. government’s dedication to blockchain-based financial infrastructure.
But not everyone benefited. Legacy payments players like Mastercard and Visa dropped by nearly 5%, with investors believing stablecoins could upset legacy payment rails. PayPal and Corpay were also defensive in the markets because of speculations around a fintech reshuffle.
The GENIUS Act is now going to the House and possibly towards reconciliation with the STABLE Act. The bill, according to experts, has the potential to bring a new era to regulated crypto finance, which would enable greater use of stablecoins in the mainstream financial system.
