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Coinbase (COIN) and other crypto stocks surged on Thursday after a major bill that cements the crypto industry’s legal standing got one step closer to the finish line.
Coinbase Global stock rose as much as 9% on Thursday as the Senate Banking Committee pushed through the CLARITY Act with bipartisan support.
Other financial platforms that offer crypto, including Gemini Space Station (GEMI), Robinhood (HOOD), and SoFi (SOFI), climbed 6%, 5%, and 3%, respectively.
Heading into Thursday’s hearing, the bill was widely expected to pass through the Republican-led Senate Banking Committee. However, it wasn’t clear whether the legislation would garner support from any Democratic lawmakers.
Also known as the Digital Asset Market Clarity Act, the bill sets basic legal standards for how regulators will divide oversight of digital assets. It dictates how financial institutions, including major banks, can conduct payment, lending, custody, and trading business.
The bill also establishes a foundation for how crypto venues can offer tokenized assets on a blockchain.
The bill passed with 15 lawmakers in favor and 9 opposed. Key Democratic senators Angela Alsobrooks of Maryland and Ruben Gallego of Arizona voted in favor of the draft. Both said they support pushing the legislation out of the committee, but didn’t guarantee future support when the bill reaches a full Senate vote.
“We have many outstanding issues still to resolve,” Gallego said. “Toughest and most critical of all is coming to an agreement on ethics guardrails for elected officials. This remains my focus moving forward.”
“The truth is this digital revolution is happening with us or without us, whether or not we regulate it to create the rules of the road or not, it is here,” Alsobrooks said.
Now the bill must pass in a full Senate vote, where it will need the support of at least seven Democratic lawmakers.
Unresolved issues for Democrats include the legislation’s language on addressing illicit finance — a specific request from law enforcement — and adding an ethics provision setting conflict-of-interest guardrails for elected officials.
One key issue the Republican committee chair refused to consider during the hearing involved how third-party crypto platforms can pay interest to customers holding stablecoins. Stablecoins are dollar-pegged crypto assets.
Coinbase and crypto trade groups fought for months with the banking industry to protect their ability to pay interest to stablecoin customers. Lawmakers introduced a compromise rule earlier this month as part of the legislation. Bank trade groups have since said that the rule still fell short.
