Senate Approval of Stablecoin Bill Boosts Circle Stock 460%

The United States Senate's approval of a landmark stablecoin bill on Wednesday has sparked a significant surge in the stock price of Circle Internet during early trading. This development has reignited hopes for the broader application of stablecoins, which were once considered a niche segment within the cryptocurrency industry. The bipartisan support for the bill marks a significant turning point in the contentious debate over cryptocurrency regulation and represents a breakthrough for an industry long mired in regulatory stagnation.

Circle, the second-largest stablecoin issuer by market capitalization, made a splashy debut on the New York Stock Exchange earlier this month. Its stock price has since risen to 173.60 dollars, up from its initial public offering price of 31 dollars. The company's flagship stablecoin, USDC, has a market capitalization of approximately 614 billion dollars. These tokens are popular for their convenience in cryptocurrency transactions without the associated volatility, as they are pegged to currencies like the dollar and aim to maintain stable value through reserve backing.

The Republican-controlled House of Representatives must now pass its version of the bill, known as the GENIUS Act, before it can be sent to the President for approval. Analysts suggest that once the bill becomes law, likely by the end of summer, stablecoins could evolve from being a funding channel for cryptocurrencies to a funding channel for the internet. Supporters argue that the bill's clear rules for issuing and managing tokens pegged to the dollar could enhance the industry's legitimacy. Several prominent companies are reportedly exploring the launch of their own stablecoins.

If signed into law, stablecoins would need to be backed by liquid assets such as dollars and short-term U.S. Treasury securities, with issuers required to disclose the composition of their reserves monthly. Analysts note that the application of stablecoins could also serve as a strong catalyst for major cryptocurrencies like Bitcoin. Stablecoins currently account for approximately 2560 billion dollars of the 33 trillion dollar total market capitalization of the cryptocurrency industry.