Circle stock jumps 20% after Tillis-Alsobrooks stablecoin deal

Circle shares jumped about 20% on May 4 after U.S. Senators Thom Tillis and Angela Alsobrooks announced a bipartisan compromise on CLARITY Act language that would bar stablecoin rewards that are “economically or functionally equivalent” to interest on bank deposits. The stock closed at $119.53, a 19.89% gain from Friday, and rose another $6.18 in overnight trading to $125.83.

The advance followed earlier gains from roughly $91.27 as investors anticipated a deal. Circle’s shares are up about 50% year to date but remain below a March 18 peak of $132.84.

Under the reported compromise, federal regulators would be directed to draft a new disclosure regime for stablecoin issuers and to produce a specific list of “permissible reward activities.” That work is expected to take place before a Senate markup of the CLARITY Act in May 2026, giving agencies time to define allowed reward structures and required disclosures.

Banking industry trade groups criticized the text, warning it does not fully prevent yield-like incentives and could prompt customers to move deposits to stablecoins. In a joint statement the groups wrote that “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… while tying rewards directly to how much/long customers hold payment stablecoins in wallets or exchanges.” The groups added they will offer recommendations to lawmakers to tighten the language.

Tillis defended the compromise in a post on X, writing that it “helps put us on a bipartisan path to pass the CLARITY Act, providing the regulatory certainty needed to foster innovation,” and noting some in the banking industry may disagree with the approach.

Circle issues a widely used dollar-pegged stablecoin and provides payment and custodial services that would be affected by the legislation. Investors have followed the bill because the final wording will determine how issuers can compensate holders and how platforms structure products.

Regulators will now translate the Senate text into detailed disclosure rules and a list of permitted reward activities. Lawmakers and industry stakeholders are expected to continue negotiating technical definitions and enforcement ahead of the Senate markup next May.