Coinbase, Circle shares surge after US Senate passes Stablecoin bill

Shares of cryptofirms Coinbase (COIN) and Circle (CRCL) surged on Wednesday after the US Senate passed the key stablecoin bill, the GENIUS Act, which will bring more legitimacy to stablecoins.

Coinbase and Circle’s gains

Circle’s shares surged over 22% while Coinbase’s shares gained 14% after the bill was passed late Tuesday. Coinbase’s gains made it the top performer among S&P 500 stocks on Wednesday.

For Circle, the issuer of USDC stablecoin, the surge adds to the tremendous run the stock has had since its market debut on June 5.

Circle’s shares surged sixfold from its IPO price of $31 to around $180 on Wednesday.

Coinbase, the largest US cryptocurrency exchange, is also the co-founder of the USDC and shares 50% of its revenue with Circle.

For Coinbase, Stablecoin has become an important source of its revenue as stablecoin-related topline increased by 50% from the previous year in the first quarter. This was also a 32% increase from the fourth quarter.

Coinbase CEO Brian Armstrong has a goal to make USDC, the number one stablecoin in the world.

Currently, Tether’s USDT holds that position.

GENIUS Act to add more legitimacy to stablecoins

The Senate passed the GENIUS Act late Tuesday with a 68-30 vote.

This bill marks a notable step for the digital asset industry, as it provides a framework enabling private entities to issue stablecoins.

Crucially, these stablecoins would operate under strict oversight, mandating full reserve backing and requiring monthly audits to ensure transparency and stability.

While the GENIUS Act represents a key legislative victory for the crypto sector, it still requires final approval to become law.

The bill now transitions to the House of Representatives, where a separate, similar piece of legislation, known as the STABLE Act, is under consideration.

Both the Senate and House versions share a common provision: they prohibit consumer stablecoins from offering yield. However, they differ on the critical aspect of regulatory authority.

The Senate’s GENIUS Act centralizes regulatory oversight primarily with the Treasury Department.

Scott Bessent, the Treasury Secretary, has been granted the broad authority under the GENIUS Act.

Last week, during a Senate appropriations subcommittee hearing, he projected that the US stablecoin market could expand significantly in the coming years, potentially growing eightfold to exceed $2 trillion.

In contrast, the House’s STABLE Act proposes a more distributed approach, allocating authority among various bodies, including the Federal Reserve and the Comptroller of the Currency.

Reconciling these differing approaches could prove to be a complex and time-consuming process.

Adding to this complexity, congressional aides indicate that House Republicans are contemplating linking the stablecoin bill to a broader package of market structure legislation, which could further prolong negotiations.

If the GENIUS Act becomes a law, it would aid the growth of the $260 billion market of stablecoin.

This will in turn provide more revenue for players like Coinbase and Circle.

The post Coinbase, Circle shares surge after US Senate passes Stablecoin bill appeared first on Invezz