The U.S. Senate passed a major bill to establish federal oversight for stablecoins which caused Circle Internet shares to rise by 16% on Wednesday.
The bipartisan support for the bill represents a significant advancement for the sector which had faced prolonged regulatory uncertainty. The House of Representatives needs to approve the legislation before it reaches President Donald Trump for signature.
The company behind USDC stablecoin operates as Circle since its public listing in early October with a market capitalization of $61.4 billion. The stock price of Circle reached $173.60 during Wednesday’s trading session while remaining above its initial public offering price of $31.
The GENIUS Act establishes new regulations which demand stablecoins to maintain full backing through U.S. dollar reserves and short-term Treasuries. The issuers need to publish their reserve information on a monthly basis.
The analysts at Bernstein declared the bill as a “watershed moment” because they predict stablecoins will become the primary payment system for internet-based commerce. The KBW brokerage firm predicts that regulated stablecoins will boost the adoption of larger cryptocurrencies including bitcoin.
Multiple corporate entities have begun planning stablecoin issuances because a developing legal structure provides them with necessary guidelines. The new bill has gained acceptance from financial observers who previously considered this asset class too dangerous for traditional banking systems.
