Shares of Coinbase, Circle surge after stablecoin bill passes Senate

Shares of cryptocurrency firms Circle and Coinbase experienced a significant surge on Wednesday, fueled by Wall Street's positive reaction to the Senate's recent approval of the GENIUS Act. This groundbreaking legislation aims to create a federal framework for stablecoins tied to the U.S. dollar. Circle, known for issuing the USDC stablecoin, saw its stock jump by 22% after the bill was passed late Tuesday, marking a continuation of its impressive performance since its market debut on June 5. Currently, Circle's shares are trading around $180, representing a nearly sixfold increase from their initial public offering price of $31. Coinbase, a co-founder of USDC and a key revenue-sharing partner with Circle, also enjoyed a boost, with its shares rising by over 10%. Stablecoins have emerged as a vital revenue source for Coinbase, contributing to a 50% increase in stablecoin-related income year-over-year in the first quarter alone. The GENIUS Act, or the Guiding and Establishing National Innovation for U.S. Stablecoins Act, will permit private firms to issue stablecoins under stringent regulations, which include requirements for full reserve backing and monthly audits. This legislative victory marks a significant milestone for the cryptocurrency industry, though it still requires final approval to become law. The bill is set to advance to the House, where a similar proposal known as the STABLE Act exists. While both bills prevent yield-bearing consumer stablecoins, they differ in regulatory oversight. The Senate version consolidates control under the Treasury, whereas the House proposal divides authority among the Federal Reserve, the Comptroller of the Currency, and other agencies. Harmonizing these approaches could be time-consuming, especially as House Republicans consider broader market structure legislation. Should the GENIUS Act become law, it could catalyze remarkable expansion within the nearly $260 billion stablecoin sector, directly benefiting major players like Circle and Coinbase. Coinbase retains all interest generated from USDC held on its platform. CEO Brian Armstrong has expressed ambitions for USDC to surpass Tether as the leading stablecoin globally. He noted the potential for more banks to collaborate with USDC, emphasizing stablecoins as a cornerstone of Coinbase's long-term growth strategy.