Yield-bearing stablecoins are drawing attention from U.S. banks and regulators as the gap between bank deposits and digital cash products narrows. These tokens began as tools for trading and settlement inside crypto markets. Some now offer returns, placing them closer to instruments long associated with the banking system.
That shift carries weight for investors. Regulatory treatment of yield-bearing stablecoins can shape capital movement, influence DeFi liquidity design, and affect which platforms gain access to deeper pools of funding.
Why Yield-bearing Stablecoins Are Under Pressure
Pressure has grown as banks warn that interest-paying digital dollars may compete with deposits at scale. The concern does not center on crypto usage. It centers on what happens if stablecoins function as everyday, yield-paying cash substitutes.
During a recent earnings call, Bank of America (NYSE:BAC) CEO Brian Moynihan pointed to Treasury-linked research indicating that large portions of U.S. bank deposits could shift into stablecoin structures under certain policy outcomes. From the banking sector’s perspective, such a move would shrink the funding …