Card Issuers Plunge as Senate Passes Stablecoin Bill, Coinbase Seeks Tokenized Stocks

Card issuers like Visa (NYSE: V) and Mastercard (NYSE: MA) have both plunged today due to the Senate passing a cryptocurrency and stablecoin rules bill yesterday. Before that, stablecoins had already caused card-issuing companies some anxiety, as there was a report that showed stablecoin adoption was rising.

People are choosing to park their money in stablecoins, whereas many are happy staking their money in them. A big stablecoin company called Circle (NYSE: CRCL) also had an IPO recently, and it is continuing to surge due to the flurry of positive news coming in about stablecoins and cryptocurrencies.

But any good news for stablecoins is bad news for Visa, Mastercard, and other card issuers. If customers increasingly prefer to use cryptos for transactions, these legacy transaction methods may see a rapid decline.

Here’s a market update as of 1:00 PM (ET) today.

• The S&P 500 is up 20.14 points, or 0.34%.
• The Nasdaq Composite is up 96.05 points, or 0.49%.
• The Dow Jones Industrial Average is up 110.95 points, or 0.26%.

Card-Issuing Stocks Fall 

• Visa’s stock is down 4%.
• Mastercard’s stock is down 3.4%.
• American Express (NYSE: AXP) is still up 1.7% due to the company targeting to Gen Z cardmembers by investing more in cards to appeal to them.

The biggest threat right now to both companies appears to be stablecoins. If stablecoins keep gaining popularity and more vendors start accepting them as payment methods, this is going to contribute to a network effect that could crush Mastercard and Visa’s profits.

The recent Senate bill, called the “GENIUS Act,” has given stablecoins and cryptocurrencies lots of legitimacy. Now, Coinbase (NASDAQ: COIN) is seeking SEC approval to launch tokenized equities trading.

What this means is that regular stocks would trade as tokens. For example, Coinbase could offer AMD (NASDAQ: AMD) as a tokenized stock on its platform. Inventors would be able to buy this tokenized stock in the form of a cryptocurrency, and Coinbase would reserve AMD shares to back these tokenized equities. It’s not a new concept, and some platforms already offer these tokenized stocks, but outright SEC approval will lead to every major U.S. crypto platform offering tokenized stocks.

The SEC approval could go through, especially since President Donald Trump and First Lady Melania Trump are friendly to cryptos, both having their own crypto tokens.

Notable Gainers Today

The broader stock market is slightly positive today due to the Middle East conflict not yet spiraling out of control. Here are some big winners:

• TMC the metals company (NASDAQ: TMC) is up 26.1% due to Korea Zinc investing $85.2 million.
• Guild Holdings (NYSE: GHLD) is up 25.7% due to the company signing a definitive agreement with Bayview Asset Management.
• Circle Internet Group is up 23.2%. This is the new stablecoin-linked entrant to the market mentioned earlier.
• SS Innovations International (NASDAQ: SSII) is up 14.5% due to hype surrounding the SSi Mantra performing the first robotic cardiac surgery two days earlier.
• Symbotic (NASDAQ: SYM) is up 16.8% as a recovery rally has accelerated.

Notable Losers Today

• Aurora Cannabis (NASDAQ: ACB) is down 20.1% after missing Q4 earnings estimates.
• 3D Systems Corp (NYSE: DDD) is down 19%.
• Cardiff Oncology (NYSE: CRDF) is down 14% due to a delayed clinical data release.
• Critical Metals Corp (NASDAQ: CRML) is down 13% as it cools from a rally triggered by a $120 million U.S. Government funding proposal.
• TransMedics Group (NASDAQ: TMDX) is down 8.6%.

The image featured at the top of this post is ©Ground Picture / Shutterstock.com.