Shares of Circle Internet Group (CRCL) surged approximately 10% in early trading Monday, following news that U.S. lawmakers have reached a bipartisan agreement on stablecoin rules within a long-stalled crypto bill. The rally also lifted Coinbase Global (COIN), which advanced nearly 5%.
The compromise, finalized by Senators Thom Tillis and Angela Alsobrooks, would broadly prohibit stablecoin rewards that are "economically or functionally equivalent" to bank deposit interest. This provision had been a major sticking point, as banks argued such rewards could drain deposits and disrupt lending. Coinbase’s chief policy officer, Faryar Shirzad, noted that while banks secured tighter caps, crypto firms "protected what matters," allowing users to continue earning rewards tied to real blockchain activity.
For Circle, the implications are significant. Its flagship stablecoin, USDC, is pegged to the U.S. dollar and generates revenue from reserves held in cash-equivalent assets and short-term Treasuries. As of the latest data, USDC supply stood at approximately $77.4 billion, representing about 24% of the $320.8 billion stablecoin market, according to DeFiLlama. Tether’s USDT remains the dominant player with a 59% market share.
Circle’s reserve income has been a key growth driver. In February, the company reported that USDC circulation surged 72% year-over-year to $75.3 billion by the fourth quarter, pushing reserve revenue to $733 million. "The key takeaway is that USDC continues scaling rapidly," said Jeff Cantwell of Seaport Research Partners. CEO Jeremy Allaire has noted that while high interest rates currently boost reserve income, a shift to lower rates could spur greater money movement and adoption.
Investors are now focused on Circle’s first-quarter earnings, scheduled for release on May 11 at 8 a.m. ET. The results will provide critical insight into whether USDC growth and reserve income can offset distribution costs and potential impacts from the new reward rules.
Despite the progress, the compromise has not yet been enacted into law. Regulatory bodies still need to finalize details on stablecoin disclosures and permissible reward structures. Narrow language could reduce incentives that have fueled USDC’s user growth on Coinbase’s platform.
Circle, headquartered at One World Trade Center in New York, made its public debut last year and trades on the New York Stock Exchange under the ticker CRCL. The stock has increasingly moved in tandem with regulatory developments rather than cryptocurrency price swings, reflecting its position as a regulated digital dollar issuer.
