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Exciting news just rose to the forefront for cryptocurrency stock Coinbase Global (NASDAQ:COIN). On June 18, shares of Coinbase surged 16%. The United States government took an important step that benefits the firm’s future. The U.S. Senate passed the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act. Passed in a commanding 68 to 30 vote, the bill establishes the first federal regulatory framework around stablecoin issuance.
Crypto industry lobbyists were big-time proponents of the bill. However, the bill still needs to pass in the House of Representatives. One might assume that the overwhelming support in the Senate will translate to the House, but the calculus is not so simple. Is Coinbase ready for success, or are investors too optimistic?
Why the GENIUS Act Is Huge for Coinbase
The passing of the GENIUS Act is certainly one of the most historic moments in the cryptocurrency ecosystem, and it has big positive implications for Coinbase. The act allows non-banks to issue stablecoins, which is very important for Coinbase due to its partnership with Circle Internet Group. Circle is the non-bank operator of USD Coin (USDC), a stablecoin backed and pegged to the U.S. dollar and the second-largest dollar-backed stablecoin in the world.
Coinbase earns 100% of the reserve income generated by USDC deposits on its platform. It also has an agreement with Circle; it receives 50% of the reserve income generated by USDC deposits outside of Coinbase. Coinbase generates a very significant amount of revenue from USDC. Last quarter, its USDC revenue came in at $298 million, representing over 15% of total net revenue. This revenue stream is also growing very fast, increasing by nearly 51% from the previous year last quarter. This is over double the 23% growth rate of Coinbase’s overall net revenues, highlighting its importance.
The fact that the GENIUS bill allows non-banks to issue stablecoins means that this revenue stream could continue flowing to Coinbase uninterrupted. If it had not, USDC would face rigorous regulatory barriers that could greatly disrupt Coinbase’s revenues.
More generally, the GENIUS Act provides legitimacy to the stablecoin market overall. It provides a bank-like regulatory framework. This involves directing regulators to create capital, liquidity, and risk management rules for stablecoin issuers. It also treats stablecoin issuers like financial institutions under the Bank Secrecy Act. This means they must have strong anti-money laundering programs. Although these rules will likely increase compliance costs, they should help increase trust in the industry as a whole. This is important to the overall proliferation of the stablecoin market, from which Coinbase can benefit.
House Deliberation Could Reduce the Positive Effects of GENIUS
There are some loose ends to tie up legislatively. The House will vote on the bill, but they will also reconcile it with the Stablecoin Transparency and Accountability for a Better Ledger Economy (STABLE) Act. Importantly, both bills provide a path for non-banks to issue stablecoins. STABLE is generally less favorable to companies like Coinbase, imposing greater restrictions in certain areas. One of the main differences between the bills regards the issuance of stablecoins by non-financial companies. GENIUS makes it more difficult for these companies, like Meta Platforms (NASDAQ:META), for example, to issue stablecoins. GENIUS’s framework beating out STABLE’s on this issue would likely increase demand for Coinbase’s offerings, as there would be less competition.
Government Action and Stablecoin Potential Place COIN in an Enviable Position
Overall, the GENIUS news is great for Coinbase. Some combination of the GENIUS and STABLE bills seems likely to become law, which would be huge for Coinbase. It would allow the firm to participate in the strong growth some predict for the stablecoin market with relatively few speed bumps. Analysts at Citigroup (NYSE:C) recently put out an extremely bullish report on the future of stablecoins.
At the end of March 2025, these analysts valued the global stablecoin market at $230 billion. The company predicts that by 2030, the size of the stablecoin market will reach between $500 billion and $3.7 trillion. According to these estimates, the stablecoin market will at least double in size. At most, it could expand by 1500%. Notably, these analysts’ base-case scenario is $1.6 trillion, implying an increase in the stablecoin market of nearly 600%. Overall, the growth potential in the stablecoin market and positive U.S. government policies put Coinbase in a great spot. The stock may just be set up for a big-time bull run.