Shares of cryptocurrency companies saw a significant uptick on Wednesday following the Senate’s passing of a long-awaited stablecoin bill, which aims to establish a clear regulatory framework for digital tokens tied to the U.S. dollar. Among the notable movements, Coinbase’s stock surged past a key buy point after unveiling its innovative stablecoin payment solution.
The legislation, referred to as the GENIUS Act, mandates strict guidelines for stablecoin issuers, including full reserve backing, monthly audits, and compliance with anti-money laundering regulations. The bipartisan support for the bill, which passed with a 68-30 vote, marks a pivotal moment for the industry as it gears up to navigate more structured regulations. However, the bill still requires approval from the Republican-controlled House to become law.
Nathan McCauley, CEO of the federally chartered crypto bank Anchorage Digital, emphasized the significance of this legislative milestone, stating that recognition of stablecoins by the Senate indicates a larger shift in how cryptocurrencies are perceived and regulated in the financial landscape. He stressed that the GENIUS Act could pave the way for more comprehensive market structure reforms.
In a strategic move, Coinbase announced its new payment solution, Coinbase Payments, which allows users to transact seamlessly using USDC stablecoins across various commerce platforms, beginning with Shopify. This integration is poised to enhance the utility of cryptocurrencies in everyday transactions, reflecting a growing trend of acceptance within mainstream commerce.
Coinbase’s stock climbed by an impressive 16.3% to reach 295.29, marking a notable recovery and suggesting strong investor confidence. It surpassed the 277.01 buy point and entered a favorable buy zone, reinforcing its position as a key player in the market with nearly 19% growth since the start of the year.
Conversely, traditional payment giants like Visa, Mastercard, and PayPal faced declines amid the news. Visa shares fell 4.9%, with reports indicating a second consecutive week of losses. While the stock remains up about 8% year-to-date, its recent drop from record highs has raised concerns among investors. Mastercard experienced a 5.4% decline, slipping to early May levels but still retaining a modest gain of 2.3% for the year. PayPal’s stock also dropped around 3%, compounding its year-to-date decline of nearly 19.7%.
Overall, the developments in the stablecoin space reflect a transformative period for cryptocurrencies as they increasingly carve out their niche in the financial system, paving the way for broader acceptance and innovation in payment solutions.
