Crypto exchange Coinbase and USDC issuer Circle have both seen their share prices leap double digits in the aftermath of a key Senate vote in favor of the GENIUS Act.

The GENIUS Act, if signed into law, would represent the first comprehensive federal framework for U.S. dollar-pegged stablecoins. By establishing clear rules for reserves, audits, and licensing, the bill could reduce regulatory uncertainty and make it easier for institutions to integrate stablecoins into mainstream finance.

Circle, which trades on the New York Stock Exchange under the CRCL ticker, has climbed 19.9% to $178.74 since the opening bell—marking a new all-time high for the stock. And Coinbase, which trades on the Nasdaq under the COIN ticker, has gained 11.9% since yesterday's close and is currently changing hands for $283.78.



The GENIUS Act's progress has been linked to bottom line of the two companies because they share an agreement that sees them split the interest earned on the cash reserves backing USDC. At the time of writing, USDC has climbed to a $61.4 billion market capitalization, according to CoinGecko data.

Circle accepts deposits, mints new USDC ERC-20 tokens on Ethereum, and keeps the cash—or cash equivalents—in reserve to facilitate redemptions. But while USDC is in circulation, Circle and Coinbase earn interest on the dollar reserves.

Both Coinbase CEO Brian Armstrong and Circle CEO Jeremy Allaire have been incredibly vocal in their support for the GENIUS Act. But there are still challenges ahead. The GENIUS Act will need to be passed by the House, which may not move immediately to vote on the legislation.

At least one analyst has cautioned that this could be a good time to take profits on COIN and CRCL. Stock analyst Gary Alexander wrote on Seeking Alpha that as expectations rise that the Federal Reserve could soon lower interest rates, investors should be wary of how that plays out for the companies' bottom lines.

Coinbase noted $297 million in its Q1 earnings from its revenue-sharing agreement with Circle–up from the $197 million it notched in the first three months of 2024.

"One of Coinbase's most reliable and profitable revenue streams over the past few years has been to encourage investors to park USDC in their Coinbase wallets (often with the incentive of a minor yield as a reward)," he wrote. "This has turned Coinbase into a quasi-bank with net interest income, earning a spread between the interest it receives from parking dollars into short-term treasury bonds and what it pays out as rewards."

But if and when the Federal Open Markets Committee lowers interest rates, it will shrink that revenue stream for both companies. An hour ahead of Wednesday's FOMC meeting, investors unanimously think that interest rates will remain the same, according to the CME FedWatch Tool. But 15% think the Fed may lower rates in July, and 57% think it'll happen in September.

Edited by Andrew Hayward

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