Yield-bearing stablecoins: An undervalued trillion-dollar new track

From regulatory fog to institutional get on board, how can yield stablecoins replicate the explosive path of money market funds?

Written by: Haotian

This perspective on the topic is too cool! Behind the introduction of various stablecoin regulatory policies, the market has indeed seriously underestimated the explosive potential of the “yield-bearing stablecoin” sector:

First, it is important to understand what a yield-bearing stablecoin is – it is essentially a “digital dollar that generates its own money.”

Unlike traditional stablecoins such as USDT and USDC, which are only digital cash instruments, yield-based stablecoins allow holders to automatically obtain an annualized return of 3%-27% by embedding yield mechanisms such as U.S. Treasury bonds, DeFi lending, and derivatives arbitrage directly into the token logic.

This is not a simple DeFi innovation, but a redefinition of the function of the stablecoin itself - evolving from “saving money” to “making money with money”.

So what about the yield stablecoin market? Income stablecoins have grown from $660 million in August 2023 to $9 billion now, a 13-fold increase in more than a year, and a 583% increase in a single year in 2024. But even with this rapid growth, it still accounts for less than 5% of the $230 billion stablecoin market. Compared with the mature scale of $7 trillion in money market funds, the trillion-level growth space of this track is still to come.

More critically, the policy winds have changed. The SEC’s regulatory stance on yield-based stablecoins has gradually become clearer from the previous vagueness, and various legislative frameworks are also accelerating. and traditional financial giants like BlackRock going straight out through products like BUIDL, and so on.

When the policy compliance path is clear, the infrastructure is perfect, and the influx of institutional funds is in place, the “income stablecoin” is likely to replicate the explosive trajectory of money market funds in 1971 and become a super bridge connecting traditional finance and digital assets.