Circle Stock Extends Gains, Hits 1-Month High On CLARITY Act Momentum

• Shares of Circle jumped over 16% to a one-month high after a key compromise on the CLARITY Act reportedly passed a major legislative hurdle.
• The bill allows cashback-style rewards but bans interest on stablecoin balances, defining them as payment tools rather than yield-generating assets.
• Coinbase, which has an equity stake in Circle and receives a cut of USDC revenue, backed the revised bill after initially raising concerns that it favored banks.

Circle Internet Group (CRCL) shares rose to a one-month high on Monday after a long-awaited compromise on the CLARITY Act cleared one of its final legislative hurdles.

Circle’s stock was trading at $116.16, up more than 16% in midday trading. On Stocktwits, CRCL was among the top-trending tickers. Retail sentiment around CRCL improved to ‘bullish’ from the ‘bearish’ zone, while chatter around it rose to ‘high’ from ‘normal’ levels over the past day.

CLARITY Act Breakthrough

The breakthrough of The Digital Asset Market Clarity Act (CLARITY Act) was reached on Friday, led by Senators Thom Tillis (R-NC) and Angela Alsobrooks (D-MD), according to PunchBowl News. 

Under the new language, crypto firms would now be allowed to offer activity-based perks, such as cashback on transactions or platform discounts. However, crypto companies are prohibited from paying interest, or APY, on idle stablecoin balances. The ruling essentially categorizes stablecoins as payment instruments rather than yield-bearing savings products, a distinction that received mixed responses across the industry.

"The banks were able to get more restrictions on rewards, but we protected what matters — the ability for Americans to earn rewards based on real usage," said Faryar Shirzad. The current text has been approved by Coinbase (COIN), which withdrew its support for the Act in January over concerns that the bill was biased in favor of banks. However, Shirzad’s post was reshared by Coinbase CEO Brian Armstrong. 

Coinbase-Circle Ties In Focus

Coinbase, which has an equity stake in Circle and commands 50% of USDC (USDC) revenue, has primarily benefited from the stablecoin’s growth through interest income on its reserves and deep integration across the exchange’s trading and payments ecosystem. Coinbase’s stock was up over 7% in midday trade. On Stocktwits, retail sentiment around COIN improved to ‘bullish’ from ‘neutral’ zone, while chatter remained at ‘high’ levels over the past day.

Senate Markup

Senate Banking Committee Chairman Tim Scott (R-SC) will likely schedule a markup as soon as the week of May 11, when Congress returns from recess. 

Industry insiders also reportedly spoke to CryptoInAmerica, saying that DeFi provisions, including developer protections under the Blockchain Regulatory Certainty Act, will be wrapped up this week. 

Read also: Pepsi ‘Playbook’ Meets Bitcoin: Cathie Wood Sees Liquidity Fueling Next Surge

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