Yield-generating stablecoins: an underestimated new trillion-dollar track

Author: Haotian

This topic perspective is so cool! Behind the introduction of various stablecoin regulatory policies, the market has indeed seriously underestimated the explosive potential of the "yield-based stablecoin" track:

First of all, we must understand what a yield-based stablecoin is - it is essentially a "digital dollar that makes money on its own."

Unlike traditional stablecoins such as USDT and USDC, which are just digital cash tools, yield-based stablecoins embed yield mechanisms such as U.S. Treasury bonds, DeFi lending, and derivative arbitrage directly into the token logic, allowing holders to automatically obtain an annualized return of 3%-27%.

This is not a simple DeFi innovation, but a redefinition of the function of stablecoins themselves - evolving from "saving money" to "money making money."

So what about the yield-based stablecoin market? The income-generating stablecoin has grown 13 times from $660 million in August 2023 to $9 billion now, and increased 583% in 2024. But even with such a fast growth rate, it still accounts for less than 5% of the $230 billion stablecoin market. Compared with the mature scale of $7 trillion of money market funds, the trillion-level growth space of this track is still to come.

What's more critical is that the policy direction has changed. The SEC's regulatory stance on income-generating stablecoins has gradually become clearer from the previous ambiguity, and various legislative frameworks are also accelerating. And traditional financial giants such as BlackRock directly exit through products such as BUIDL, etc.

When the three major elements of clear policy compliance path, perfect infrastructure, and influx of institutional funds are in place, "income-generating stablecoins" are likely to replicate the outbreak trajectory of money market funds in 1971 and become a super bridge connecting traditional finance and digital assets.