Shares of Circle Internet Group experienced a significant surge following a crucial legislative development concerning the cryptocurrency market. Over the weekend, lawmakers reached a compromise on the CLARITY Act, a comprehensive market structure bill that includes provisions affecting stablecoins and their associated reward programs.
The revised legislation, unveiled on Friday, imposes restrictions on how crypto companies can operate in relation to stablecoin deposits. Notably, the bill prohibits these companies from offering savings account-like interest or yields on passive stablecoin deposits, effectively delegating that capability exclusively to traditional banks. However, it does permit rewards that are tied to active participation, such as trading, transactions, or staking—a provision that has been generally well-received in the crypto sector.
Following the announcement, Circle’s shares jumped by 16%. This uptick was echoed by Coinbase, the primary distributor for Circle’s USDC stablecoin, which saw a gain of over 7%. Other notable players in the crypto market, including BitGo and Galaxy Digital, also experienced increases of 12% and 5%, respectively.
In tandem with stocks, the price of Bitcoin remained relatively stable at around $79,000, just shy of surpassing the $80,000 mark over the weekend, a milestone not reached since January. The opportunity to earn yields—primarily through reward programs—has long served as a strong incentive for users to hold stablecoins, mirroring the interest options typically provided by traditional banks.
While the revised legislation marks progress for major players like Circle and Coinbase, it could pose challenges for smaller crypto platforms that have relied on high-yield deposit offerings to attract customers. This shift indicates a larger trend within the crypto industry aimed at moving away from return-focused products and towards enhancing the underlying financial infrastructure.
Although most banks have yet to officially respond to the new legislation, Bank of America characterized the outcome as largely beneficial for the banking sector. Analyst Ebrahim H. Poonawala commented that the CLARITY Act’s resolution of the stablecoin yield debate should ease concerns regarding deposit migration, reduce regulatory ambiguity, and facilitate banks’ engagement with digital asset infrastructure under more controlled conditions.
In the wake of the bill’s developments, the crypto industry has shown a largely positive response. Coinbase CEO Brian Armstrong, an active participant in discussions surrounding the legislation, expressed his approval on social media, signaling optimism about the future of cryptocurrency and its positioning alongside traditional banking practices.
