Senate Approval of GENIUS Act Boosts Coinbase 16% and Circle 33.8%

On Wednesday, shares of Coinbase and Circle surged following the U.S. Senate's approval of the GENIUS Act, a bill aimed at providing clearer regulations for stablecoins. This legislative development has sparked optimism within the crypto sector, particularly for stablecoins, which have gained popularity for their ability to offer the convenience of cryptocurrencies without the associated volatility. These tokens are pegged to stable assets like the U.S. dollar, aiming to maintain a consistent value backed by reserves.

The GENIUS Act received bipartisan support, marking a pivotal moment in the ongoing debate over crypto regulation. This breakthrough is expected to provide clearer guidelines for issuing and managing dollar-pegged tokens, potentially bringing greater legitimacy to the sector. Several prominent corporations are reportedly exploring the launch of their own stablecoins, further indicating the growing interest and potential for this segment of the crypto market.

Circle, the issuer of the second-largest stablecoin by market value, USDC, saw its shares close up by 33.8%. Coinbase, which offers crypto trading and has a significant stake in USDC, ended the day with a 16% increase. The commission-free brokerage Robinhood, which also provides crypto trading services, gained 4.5%. The Republican-controlled House of Representatives must now pass its version of the bill before it can be sent to the President for approval.

Circle's USDC stablecoin has a market value of around $61.4 billion. The company co-founded USDC in partnership with Coinbase, and the token underpins much of the crypto exchange's stablecoin revenue. In the first quarter, Coinbase's stablecoin revenue jumped nearly 51% as USDC's market value reached a record high. The stablecoin legislation is one of two major crypto bills that industry supporters hope to have signed into law this year.

Proponents of the bill argue that by establishing clearer rules, it could drive greater adoption and legitimacy for stablecoins. Circle CEO Jeremy Allaire expressed his enthusiasm, stating that the legislation could enhance U.S. economic and national competitiveness for decades to come. If signed into law, the GENIUS Act could unlock fresh growth in the $256 billion stablecoin market and boost revenue for digital asset infrastructure firms such as Circle and Coinbase.

The passage of the bill is expected to accelerate demand for stablecoins, which are already seeing impressive usage. Analysts predict that once the bill is enacted, stablecoins could evolve from being a niche part of the crypto sector to becoming a fundamental component of the internet's financial infrastructure. This development is likely to drive further innovation and investment in the stablecoin market, benefiting companies like Circle and Coinbase that are at the forefront of this technology.