U.S. Senate Passes GENIUS Act, Coinbase Surges 10.57%

The U.S. Senate passed the GENIUS Act, formally known as the Guiding and Establishing National Innovation for U.S. Stablecoins Act, by a decisive 68-30 vote. This landmark legislation marks the first comprehensive federal regulatory framework for stablecoins, which are cryptocurrencies pegged to real-world assets, with approximately 99% of all stablecoins tethered to the U.S. dollar. The GENIUS Act establishes comprehensive federal guardrails for dollar-pegged stablecoins, including requirements for full reserve backing, monthly audits, and anti-money laundering compliance.

The passage of the GENIUS Act triggered significant market reactions, with Coinbase Global surging 10.57% to $280.67 and Circle Internet Group experiencing an extraordinary 18.08% jump to $176.12. This legislative victory represents a milestone for the crypto industry, which invested approximately $250 million in the 2024 election cycle to secure what is now considered the most pro-crypto Congress in U.S. history. The passage signals a potential paradigm shift in digital payments and creates new opportunities for major financial institutions, fintech companies, and even traditional retailers to enter the stablecoin market.

The legislation grants sweeping authority to Treasury Secretary Scott Bessent, who recently projected that the U.S. stablecoin market could grow nearly eightfold to over $2 trillion in the coming years. The bill opens doors to a broader range of stablecoin issuers, including banks, fintech companies, and major retailers looking to launch their own digital currencies or integrate them into existing payment systems. However, the GENIUS Act includes restrictions preventing non-financial large tech companies from directly issuing stablecoins unless they establish partnerships with regulated financial entities, a provision designed to address monopoly concerns.

The legislation faced significant political hurdles, initially bleeding Democratic support when an Abu Dhabi-backed firm announced plans to use $2 billion in stablecoin from Trump-linked World Liberty Financial to invest in crypto exchange Binance. Despite criticism from Democrats including Senator Elizabeth Warren, who argued the bill inadequately addresses conflict-of-interest concerns related to President Trump’s cryptocurrency ventures, 18 Democrats ultimately supported the measure. Senator Cynthia Lummis noted the unexpected difficulty of the legislative process, stating “I had no idea how hard this was going to be,” while Senator Bill Hagerty described it as “murder to get them there” regarding Democratic support.

Coinbase Global closed at $280.67, representing a substantial 10.57% gain, with the stock showing strong momentum following the Senate vote. The cryptocurrency exchange, with a market capitalization of $71.475 billion, has demonstrated impressive year-to-date returns of 13.02% and one-year returns of 18.93%. Coinbase’s strong financial metrics include a profit margin of 22.03% and revenue of $6.67 billion over the trailing twelve months, positioning the company well to benefit from increased regulatory clarity and mainstream stablecoin adoption.

Circle Internet Group experienced an even more dramatic surge, jumping 18.08% to $176.12, reflecting investor enthusiasm for the stablecoin issuer’s prospects under the new regulatory framework. Circle’s market capitalization reached $42.756 billion, with the company showing remarkable year-to-date returns of 468.68%, significantly outperforming the S&P 500’s 2.14% gain over the same period. As a leading stablecoin company with revenue of $1.89 billion and a profit margin of 9.09%, Circle stands to benefit directly from the GENIUS Act’s creation of a regulated pathway for stablecoin issuance and the potential influx of new market participants.

The market enthusiasm reflects broader industry trends, with companies like Shopify already implementing USDC-powered payments through Coinbase and Stripe, while Bank of America’s CEO recently indicated the bank is exploring stablecoin issuance opportunities. Industry giants including Amazon and Walmart are reportedly developing stablecoin-style payment offerings, suggesting that traditional payment networks may need to adapt to this evolving digital landscape. JPMorgan Chase has taken a different approach, launching JPMD, a deposit token on Coinbase’s Base blockchain for institutional clients, demonstrating how traditional financial institutions are positioning themselves in the emerging stablecoin ecosystem.