Circle Stock Soars 20%... Will Stablecoin Regulation Become an Opportunity?

▲ Circle, USDC, Stablecoin, USD/ChatGPT generated image ©

Market expectations were immediately reflected as Circle's stock price surged 20% in a single day after a regulatory compromise on stablecoin revenue structures emerged.

According to cryptocurrency media outlet CoinGeape on May 4 (local time), Circle's stock price broke through $118 during intraday trading, rising by as much as 20%. The year-to-date increase also exceeded 45%, showing strong performance in contrast to the overall bearish trend in cryptocurrencies this year.

The key background to this surge is the 'stablecoin revenue distribution compromise' surrounding the U.S. cryptocurrency market structure bill, the Clarity Act. The latest draft bill allows third-party crypto companies to provide stablecoin rewards in the form of activity-based compensation. Conversely, the structure prohibits interest payments based on simple holding.

This structure is advantageous for Circle. Circle issues the stablecoin USD Coin (USDC), which is particularly widely used on Coinbase. If the reward system is maintained, it is expected to expand user participation and strengthen the revenue base.

Expectations for the bill's passage also stimulated the stock price increase. Based on data from the decentralized prediction market Myriad, the probability of the Clarity Act passing rose to 69%. If the bill passes, regulatory uncertainty across the cryptocurrency industry will be resolved, creating a positive environment for business expansion for companies like Circle.

European regulatory approval also acted as a positive factor. Circle already holds the European Union's MiCA license, and has received additional approval from the French Financial Markets Authority (AMF) to provide stablecoin-related asset custody and transfer services. This has established a foundation for expanding services across the European Economic Area through its French subsidiary.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*