Current Share Just 6%, but Rapid Growth Expected
Yield-bearing stablecoins, including tokenized Treasurys, could grow from just 6% to 50% of the stablecoin market, according to JPMorgan. Analysts highlighted their appeal in today’s high-interest environment, where they act as alternatives to traditional money market funds.
The top five tokens in this category—Ethena's USDe, Sky Dollar's USDS, BlackRock's BUIDL, Usual Protocol's USD0, and Ondo Finance's USDY—have surged from $4 billion to $13 billion since November.
Regulatory Momentum Adds Fuel
The SEC’s recent approval of a registered yield-bearing stablecoin (YLDS by Figure Markets) provides further legitimacy. However, regulatory hurdles still remain, as these assets are classified as securities, which restricts access and imposes compliance burdens.
Why Investors Are Flocking to Yield-Bearing Options
Unlike Tether’s USDT or Circle’s USDC, which do not share interest with holders, yield-bearing stablecoins allow users to earn yield passively without taking lending risks or giving up custody. Traders can also post tokenized Treasurys as collateral on Deribit and FalconX.
DeFi projects like Frax Finance are increasingly integrating these products as base assets.
Challenges Remain: Liquidity and Accessibility
Traditional stablecoins currently dominate with a $220 billion market cap across various chains, offering higher liquidity and ease of use. Yield-bearing options still face lower adoption due to regulatory complexity and less-developed infrastructure.
Still, JPMorgan believes their appeal as collateral in derivatives trading, DAO treasuries, and idle cash investments will help close the gap.
