Crypto-related stocks surged on Monday after news of a deal on a key stablecoin provision in the CLARITY Act, a U.S. crypto bill which has been stalled in Congress for months.
The bill establishes a regulatory framework for digital commodities—”defined by the bill as digital assets that rely upon a blockchain for their value”—and would enable the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission to regulate cryptocurrencies. The Senate is planning a crypto markup later this month.
Shares in Circle Internet Group (CRCL) rose over 18% in afternoon trading on Monday at the time of this writing, while Coinbase Global (COIN) surged 7%. Coinbase is a distributor in Circle’s USDC stablecoin.
After months of negotiation between bank and cryptocurrency lobbies, Senators Thom Tillis (R-N.C.) and Angela Alsobrooks (D-Md.) finalized a bipartisan compromise on Friday to restrict stablecoin yield and rewards, in a bill that directs regulators to propose a new series of stablecoin regulations. The news was first reported by Punchbowl News.
At issue is whether or not stablecoin issuers can offer yield-bearing products and other rewards, which could incentivize consumers away from depositing money in traditional banks, according to Reuters. Coinbase and other crypto companies have argued they need to offer some type of rewards to remain competitive.
The updated, finalized language restricts crypto companies from paying out yields on stablecoin deposits, leaving that to traditional banks, but does allow rewards tied to trading, transactions, or staking, per CNBC.
“In the end, the banks were able to get more restrictions on rewards, but we protected what matters, the ability for Americans to earn rewards, based on real usage of crypto platforms and networks,” Coinbase chief policy officer Faryar Shirzad posted on X; while Coinbase CEO Brian Armstrong added, “Mark it up.”
President Donald Trump has prioritized crypto reform during his second term in office. Critics have questioned his aggressive promotion of crypto-friendly reforms and initiatives, and whether the president and his family have a conflict of interest due to their personal stake in crypto investments.