According to Citigroup, the crypto market structure bill before Congress – known as the CLARITY Act – could significantly improve Coinbase’s growth prospects if passed. Shares of Coinbase are falling after the company posted a surprise first-quarter loss on Thursday evening. Trading activity on the platform fell, hurt by the collapse in crypto prices in the first three months of the year. Subscription revenue – intended to help Coinbase diversify away from its reliance on speculative trading – also fell short of expectations. However, Citi is long-term bullish on the stock and is particularly bullish on stablecoins, payments and institutional adoption – and if CLARITY is adopted, it would enable the launch of more products in those companies as well and encourage greater institutional participation, analysts said in a note Friday. “Ultimately, we see the potential passage of CLARITY as a key upside catalyst for COIN,” Citi said. The investment bank also pointed to the Coinbase Developer Platform, a suite of tools and services for developers to build on-chain applications, as a potential catalyst for the stock, saying it is “poised to handle demand for CLARITY.” [traditional finance]”Last week, lawmakers agreed to a compromise on key language proposed in crypto legislation regarding interest paid to users on stablecoin balances and activities. The updated version restricts crypto companies like Coinbase from paying savings account-like interest on passive stablecoin deposits, but allows rewards as usage-driven incentives that could be tied to activities such as trading, transactions or staking. The crypto industry expects before May 21, a committee vote with bipartisan support. The White House is aiming for a full Congressional vote on the bill July 4.
