Key Points
Last Friday, a draft cryptocurrency legislation updated key provisions, restricting crypto firms from paying savings-account-like interest or earnings on users' idle stablecoin deposits. Earning yield on holdings of stablecoins like USDC, typically distributed as rewards, represents the primary incentive for holding stablecoins, with logic similar to bank deposit interest. This legislative development aligns with a broader industry trend: the crypto sector is shifting away from purely chasing high-yield products towards leveraging crypto technology to upgrade traditional financial infrastructure.
On June 5, 2025, Circle Internet Group officially began trading on the New York Stock Exchange in New York, USA. Over the weekend, US lawmakers reached a compromise on the Clarity Act, a crypto market structure bill, which preserves stablecoin reward programs under specific conditions. Boosted by this news, Circle's stock price surged significantly. The revised cryptocurrency legislative proposal from last Friday changed core language: it prohibits crypto platforms from distributing interest income similar to bank savings on users' idle stablecoin deposits, reserving such deposit-taking and interest-paying businesses for traditional banks. However, the bill still allows platforms to issue rewards tied to usage activities, which can be linked to actions like trading, transferring, or staking, meeting prior market expectations. Stablecoin issuer Circle saw its stock price jump 16%. Coinbase Global, Inc., a primary distribution platform for Circle's USDC stablecoin, rose over 7%. BitGo and Galaxy Digital advanced 12% and 5%, respectively. Bitcoin briefly surpassed $80,000 over the weekend, reaching its highest level since January this year, before retreating to around $79,000, with overall volatility contained. Earning reward income by holding stablecoins like USDC has consistently been a core motivation for users to allocate to stablecoins, a nature similar to earning interest on bank deposits. The revision of the bill's clauses is considered a relative positive for Circle and Coinbase Global, Inc.; however, it may create operational pressure for small and mid-sized crypto platforms that heavily rely on high-yield deposit products for customer acquisition. This legislative progress also fits the industry's overall pivot: the crypto space is gradually moving away from单纯的 yield-generating products and focusing more on upgrading financial infrastructure applications. Most banks have not yet formally commented on the bill, but Bank of America believes the legislation is generally more beneficial than harmful for the financial sector. In a research report on Monday, Bank of America analyst Ibrahim H. Poonawala stated, "For major banking segments, the resolution of the Clarity Act and the settling of the stablecoin yield debate are overall positive developments. This move will alleviate concerns about bank deposit outflows, reduce regulatory uncertainty, and allow banks to participate in digital asset infrastructure businesses under more manageable rules." The crypto industry overall reacted positively to the legislative compromise. Brian Armstrong, CEO of Coinbase Global, Inc., who was deeply involved in Congressional discussions on the bill and has long advocated for fair competition between crypto firms and banks, posted on social platform X early Monday, calling it "A positive moment worth remembering."