Yield-bearing crypto assets are poised for significant growth, driven by the clarifying regulatory framework established by the U.S. Guiding and Establishing National Innovation for US Stablecoins Act (GENIUS Act). The Act, signed into law in July 2025, provides the first comprehensive federal legislation on stablecoins, defining them as non-securities and requiring strict 1:1 reserves (backed by cash or short-term U.S. Treasuries). This regulatory clarity is a critical factor in enabling broader institutional adoption of digital assets.
A key distinction in the Act is that while it prohibits stablecoin issuers from paying interest directly on the stablecoin itself, it opens a clear, regulated pathway for these stablecoins to be used as collateral or currency for Decentralized Finance (DeFi) projects that are yield-bearing. This structured legal path significantly reduces the risk and uncertainty for major financial institutions, who prioritize compliance, allowing them to monetize stablecoin holdings through regulated on-chain finance. Analysts note the “yield gap” between crypto (8%–11% of assets generating yield) and traditional finance (55%–65%) is now narrowing rapidly.The market for interest-bearing stablecoins has already jumped approximately 300% over the past year. By providing oversight, reserve standards, and legal protections (including stablecoin holders’ priority in the event of issuer insolvency), the GENIUS Act is expected to catalyze broader stablecoin adoption. This structural maturation is projected to drive rapid growth in related products, such as tokenized real-world assets (RWAs), and enhance their use as collateral across regulated lending and rate markets.
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