Circle stock surges as CLARITY Act deal reshapes crypto yield

Shares of Circle surged sharply after US lawmakers reached a compromise on the market structure legislation known as the CLARITY Act, easing a key area of uncertainty around stablecoin rewards.

The stock jumped 16%, while Coinbase, the primary distributor of Circle’s USDC stablecoin, rose more than 7%.

Other digital asset firms also gained, with BitGo up 12% and Galaxy Digital advancing 5%.

The move came after revised language in the bill clarified how stablecoin issuers can incentivize users.

Bitcoin was little changed at around $79,000, after briefly topping $80,000 over the weekend.

Lawmakers draw line on yield, allow activity-based rewards

At the center of the development is a compromise that restricts stablecoin issuers from offering interest-like returns on passive deposits, while still permitting rewards tied to user activity.

The updated proposed Digital Asset Market Clarity Act text states: “No covered party shall, directly or indirectly, pay any form of interest on yield (whether in cash, tokens, or other consideration) to a restricted recipient — (A) solely in connection with the holding of such restricted recipient's payment stablecoins; or (B) on a payment stablecoin balance in a manner that is economically or functionally equivalent to the payment of interest or yield on an interest-bearing bank deposit.”

However, the legislation allows incentives tied to “bona fide activities or bona fide transactions,” preserving mechanisms such as trading or transactional rewards.

This distinction aligns crypto reward structures more closely with models used in traditional financial products like credit cards.

The compromise was negotiated by US Senators Thom Tillis and Angela Alsobrooks and is expected to clear the way for a Senate Banking Committee markup, a key procedural step in advancing the bill.

Industry participants noted that firms may need to shift from “buy and hold” yield offerings to models centered on active usage to comply with the proposed framework.

Industry response and broader implications

The revised language has been broadly welcomed by major industry players.

Coinbase CEO Brian Armstrong, who has been closely involved in discussions, wrote “Mark it up.”

Meanwhile, Coinbase chief legal officer Paul Grewal said the framework “preserves activity-based rewards tied to real participation on crypto platforms and networks, which is what the bank lobby said they wanted,” adding that “we’re focused on getting a bill done and are satisifed that this language should not be the basis of any objection.”

Traditional financial institutions have also reacted positively.

Bank of America described the outcome as supportive for the broader sector. “Across bank sub-sectors, the CLARITY Act’s resolution of the stablecoin yield debate is a net positive,” said analyst Ebrahim H. Poonawala.

“It should alleviate concerns tied to deposit flight, reduce regulatory uncertainty, and allow banks to engage with digital-asset infrastructure on more controlled terms.”

The development highlights a broader shift in the crypto industry away from passive yield products and toward utility-driven use cases.

While the compromise is seen as a relative win for large players like Circle and Coinbase, it may pressure smaller platforms that rely heavily on high-yield deposit products to attract users.

The legislation also includes provisions for future rulemaking by the US Treasury and the Commodity Futures Trading Commission, which will further define how rewards can be structured.