Circle Internet Group’s initial public offering on the New York Stock Exchange on June 5, 2025 in New York City, USA.
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Circle stock soared over the weekend after lawmakers agreed to a compromise on a market structure bill known as the Clarity Act that would preserve the stablecoin rewards program under certain conditions.
On Friday, key language in the proposed crypto bill was updated to restrict crypto companies from paying savings account-like interest rates or yields to users of passive stablecoin deposits, leaving that function to traditional banks. However, as expected, the bill allows for rewards as usage-based incentives that can be tied to activities such as trading, transactions, and staking.
stablecoin issuer circle Although it increased by 16%, coinbaseCircle’s leading USDC stablecoin seller rose more than 7%. bitgo and galaxy digital They rose 12% and 5%, respectively.
Bitcoin After the flagship cryptocurrency topped $80,000 last weekend for the first time since January, its price remained little changed at about $79,000.
The yield earned on stablecoins such as USDC, usually in the form of rewards, is a key incentive for users to hold the coin, similar to the interest earned on cash in a bank account. The revised language is a relative advantage for Circle and Coinbase. But it could put pressure on smaller cryptocurrency platforms, which have relied heavily on high-yield deposit products to attract users.
This development also coincides with an industry-wide shift away from profit-driven products and services to the use of cryptocurrencies in upgrading financial infrastructure.
Although most banks have not yet considered the bill, Bank of America argued that the bill is a net win for the industry.
“Across the banking subsector, the resolution of the stablecoin yield controversy through the CLARITY Act is a net positive,” Bank of America analyst Ebrahim H. Poonawalla said in a note Monday. “This should alleviate concerns associated with deposit flight, reduce regulatory uncertainty and allow banks to engage with digital asset infrastructure on more controlled terms.”
The cryptocurrency industry has so far responded positively to this development.
Coinbase CEO Brian Armstrong, who was heavily involved in the debate on Capitol Hill over the bill and is a strong supporter of leveling the playing field between crypto companies and banks, posted on X on Monday morning: “Raise the price.”
—CNBC’s Michael Bloom contributed reporting
