Coinbase (COIN) and Circle (CRCL) stocks exploded on Wednesday, surging 16.3% and 33.8% respectively, after the U.S. Senate passed the GENIUS Act—a landmark bill creating the first federal framework for stablecoins.
“History is being made. The GENIUS Act will drive U.S. economic competitiveness for decades.”
— Jeremy Allaire, Circle CEO
The 68-30 vote marks a seismic shift for crypto regulation, validating Wall Street’s bet that clear rules could unlock a $2 trillion stablecoin market within a decade.
What’s Inside the GENIUS Act?
The bill's strongest provisions are already starting to change the industry. Stablecoins must now be 1:1 collateralized with cash or short-term Treasuries, so that every token can be fully redeemed and the risk of undercollateralized runs is eliminated.
Issuers like Circle will need to disclose monthly public audits of their reserves, giving investors unprecedented disclosure. For the first time, issuers of stablecoins will be directly subject to the jurisdiction of the Treasury and OCC to license and supervise, alongside banks.
And in a move welcomed by tech developers, the bill mandates interoperability standards, bringing stablecoins out of their insular blockchain environments to exchange freely between them.
Trading Frenzy
The market reacted quickly and dramatically. Circle's volume spiked to 4.5 million shares—three times its 30-day average—as the stock rose to a high of $200.90, up a jaw-dropping 500% from its June 5 IPO price.
Coinbase added $4.5 billion in market cap in the meantime, as options traders bought up bets that the stock would reach $350 by July. The ripple effect was cross-industry: Robinhood jumped 4.5%, and PayPal and Block declined, as investors rebalanced their bets on whose payment rails will dominate in a stablecoin world.
"Stablecoin Summer"
Analysts disagree on whether this "stablecoin summer" will spill over into spot token prices. Some, like Bernstein, assume stablecoin growth brings fresh liquidity into the crypto system, traditionally a harbinger of Bitcoin upswings.
On-chain observations already show USDC supply jumping 22% as stocks fell last week, pointing to traders rotating capital into regulated stablecoins.
Others caution that Tether (USDT) is still the ruler with a 70% market share, and the GENIUS Act does not talk about other macro headwinds like Fed policy.
An essential metric to follow is USDC payment adoption. Coinbase's fresh Shopify integration now makes it possible for merchants to settle stablecoin payments, a change that can shake up Visa and Mastercard's dominance of e-commerce.
What's Next
The bill's ride is not over yet. It now heads to the House, where the competitor STABLE Act—with tighter state-level regulation—may muddy the path to final passage.
Political dawdling is to be expected, as House Republicans demand combining GENIUS with broader crypto market structure reforms.
Another area of disagreement: both bills ban interest-bearing retail stablecoins, adding to a substantial source of income for issuers and potentially limiting consumer demand.
The Bottom Line
Senate approval of the GENIUS Act is more than a regulatory milestone—it's a force transforming crypto's role in the mainstream financial universe. For investors, the stablecoin rally could hinge on House negotiations and real-world adoption. One thing's for sure: Wall Street is betting big on the promise of "stablecoin summer."
