Shares of Circle Internet Group rose almost 20% on Monday after two U.S. senators reached a deal on a key issue that had stalled progress on national cryptocurrency laws.
After months of negotiations, the agreement was immediately met with strong criticism from banks when it was announced.
Lawmakers Push Stablecoin Compromise Despite Bank Resistance
On May 5th, Senator Thom Tillis announced on X that he and Senator Angela Alsobrooks had come to an agreement after months of discussions with people in the banking industry. Tillis stated that this agreement tackles a major worry for banks: customers withdrawing their deposits.
So, from what I understand, the deal we’ve reached basically stops stablecoin rewards from working *exactly* like traditional interest accounts you’d get at a bank. Senator Tillis made it clear that banks were involved in these talks the whole time, which makes sense – they definitely have a stake in how this all plays out. It sounds like they wanted to make sure stablecoins didn’t directly compete with deposits.
The plan still lets crypto businesses offer rewards to customers, which is a compromise that preserves some of their current practices.
Banks expressed disagreement with the senators’ proposal. In a joint statement, leading banking associations acknowledged the senators’ intention was positive, but argued the specific wording of the proposal wasn’t strong enough to achieve the desired outcome.
The group pointed to studies showing that stablecoins offering interest could lower loans for consumers, small businesses, and farmers by at least 20%. They promised to share specific recommendations with legislators soon.
Tillis and Alsobrooks remained firm in their support of the deal, confidently stating it was finalized and politely but firmly disagreeing with the banks’ concerns.
Paul Grewal, Coinbase’s top lawyer, previously participated in White House discussions about this issue in February. He responded to the latest developments on X (formerly Twitter) with his typical understated style.
He wrote that he felt compelled to congratulate those in the banking industry. He noted they had achieved something rare in the current political climate: uniting Republicans and Democrats in agreement.
Circle Stock Rebounds
As an analyst, I saw a very quick reaction from the markets when the news broke. Circle’s stock closed on May 4th around $120, a significant jump from the previous day’s close of about $100. The positive momentum continued even after the market closed, with the stock reaching approximately $126 in after-hours trading.
Things changed quickly for this stock. Just a few weeks ago, around late March, it took a big hit – it dropped almost 20% in one day! The initial versions of a new law were making people worried they might completely ban stablecoin yields, and that caused a lot of panic selling. It’s a complete turnaround from where things were heading.
The response to this latest change has been notably different. While interest payments are still limited, other types of rewards are now allowed, which experts believe aligns with how Circle currently operates. Circle already profits from the returns earned on the reserves that support its USDC stablecoin, instead of sharing those earnings with users.
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2026-05-05 22:36