Yield-bearing stablecoins surge over the past six months…market expands despite US regulatory debate

As debate continues in Congress over the payment of rewards linked to stablecoins—a key point of contention in the Clarity Act, a bill to clarify the US market structure—data show that the market for “yield-bearing stablecoins” is rapidly expanding.

On the 13th (Korea time), digital-asset news outlet Cointelegraph, citing a Messari report, said the yield-bearing stablecoin market posted growth about 15 times faster than the broader stablecoin market over the past six months.

Specifically, while the total stablecoin market capitalization rose about 9% over the past six months, the market caps of yield-bearing stablecoins such as Circle’s USYC (+198%), Paxos’ USDG (+169%), TronDAO’s USDD (+114%), and Ondo Finance’s USDY (+91%) jumped sharply. Messari analyzed that “these products appear to be perceived more like money market funds (MMFs) or bank deposits than as a means of payment.”

Still, the total market capitalization of yield-bearing stablecoins is estimated at about $22.7 billion. That remains small compared with the overall stablecoin market, which stands at $303.0 billion.

Meanwhile, a debate is unfolding in the US Congress amid concerns that yield-bearing stablecoins could encroach on the traditional financial sector’s deposit system. The scope of stablecoin rewards is a main driver of the dispute. Traditional finance worries that if digital-asset platforms pay rewards with interest-like characteristics, bank deposits could see large-scale outflows, while the digital-asset industry argues that overly restricting rewards would weaken the competitiveness of related sectors such as decentralized finance (DeFi).