Key Takeaways
- Tillis and Alsobrooks reached a May 4 deal to ban stablecoin rewards functioning like bank interest.
- Circle (CRCL) stock surged nearly 20% to $119.53 as the market reacted to the bipartisan CLARITY Act update.
- Regulators will now draft a new disclosure regime for Circle and others before a Senate markup in May 2026.
Stock’s YTD Gains Hit 50%
Shares of stablecoin issuer Circle (CRCL) jumped nearly 20 percent on May 4, just days after U.S. Sens. Thom Tillis, R-N.C., and Angela Alsobrooks, D-Md., reached a compromise on the wording around stablecoin rewards in the CLARITY Act. Market data show that CRCL, which closed Friday at around $100, ended Monday trading at $119.53, a 19.89 percent increase.
The rally continued into overnight trading, with the stock adding another $6.18—a gain of 5.21 percent—to reach $125.83. Before Monday’s surge, the stock had climbed from $91.27 amid optimism that the Senate would reach a bipartisan agreement on the wording. While the stock remains significantly below its March 18 peak of $132.84, the surge brought Circle’s year-to-date gains to just over 50 percent.
As widely reported, the agreement reached by Tillis and Alsobrooks introduces a broad prohibition on offering stablecoin rewards in a way that is “economically or functionally equivalent” to interest paid on traditional bank deposits. The provision is intended to draw a clearer line between cryptocurrency products and regulated banking services.
The agreed-upon text reportedly directs federal regulators to develop a new disclosure regime for stablecoins and create a specific list of “permissible reward activities.” While the compromise is viewed as a major step forward, banking industry lobby groups, which have opposed provisions allowing yield on stablecoin holdings, issued a statement asserting the fix falls short.
The lobby groups repeated their argument that allowing stablecoin issuers and cryptocurrency exchanges to indirectly offer what amounts to interest will inevitably lead to the “deposit flight” they have long warned of.
“Overtly incentivizing the idle holding of payment stablecoins for extended periods of time, and for specific balances, would negate the goals of the upfront prohibition (to deter deposit flight) while tying rewards directly to how much/long customers hold payment stablecoins in wallets or exchanges,” the lobby groups said in a joint statement.
The groups added that they would provide suggestions to lawmakers in the coming days to strengthen the proposed language.
However, in an apparent response to reports that banking groups were dissatisfied with the latest compromise, Tillis insisted the proposed wording “is a substantially improved, consensus-based product.” He added that the compromise helps move the CLARITY Act forward and suggested the window for further negotiations has closed.
“[The compromise] helps put us on a bipartisan path to pass the CLARITY Act, providing the regulatory certainty needed to foster innovation,” Tillis said in a post on X. “Some in the banking industry may not want either of these things to happen, and we respectfully agree to disagree.”