The issuance of yield-generating stablecoins has seen a significant uptick following the U.S. approval of the GENIUS Act in July — legislation that restricts stablecoin issuers from offering direct yields to holders.
Recent data highlights that tokens like Ethena’s USDe and Sky’s USDS have emerged as the biggest gainers in this post-GENIUS landscape. These stablecoins offer yield incentives when staked within their own protocols.
Since July 18, USDe’s circulating supply has soared by 70%, reaching 9.49 billion tokens — making it the third-largest stablecoin by market cap. Meanwhile, USDS grew 23% in supply to approximately 4.81 billion, placing it in fourth place, according to DeFiLlama data.
This surge in USDe’s adoption has triggered a 60% jump in the price of ENA — Ethena’s governance token — bringing its price to $0.58, as per CoinGecko.
GENIUS Act Fuels Growth of Protocol-Based Yield Tokens
Anthony Yim, co-founder at analytics firm Artemis, commented on X, “Despite the GENIUS Act cracking down on yield for stablecoins, supply of yield-bearing tokens has exploded — a surprising shift in the market.”
Julio Moreno, head of research at CryptoQuant, explained that the new restrictions have prompted investors to seek yield through protocol-native staking options like USDe and USDS.
“With issuers now barred from paying out yield directly, users are flocking to stablecoins that embed returns within their native ecosystems,” said Moreno. “This explains the rapid expansion in supply for these types of assets.”
Stablecoin Market Could Approach $300 Billion
The total value of stablecoins in circulation has grown from $205 billion at the start of 2025 to $268 billion currently — a 23.5% increase, based on DefiLlama’s latest numbers.
Moreno believes this momentum could push the market close to $300 billion by year’s end if the pace continues.
However, not everyone sees an unlimited upside. Temujin Louie, CEO of Wanchain, cautioned that tokenization by traditional financial institutions may slow the growth trajectory of stablecoins. He noted that tokenized money market funds offer similar speed and flexibility without compromising on compliance and security — two areas where stablecoins have typically held an edge.
DeFi Demand Poised to Rise
A report released in July predicts that the GENIUS Act might unintentionally drive more users toward decentralized finance (DeFi) protocols built on Ethereum, as yield-bearing options within these ecosystems remain viable.
Yield vs Inflation: The Real Returns
Staking, lending, and backing tokens with real-world assets like U.S. Treasuries are some of the ways stablecoins can produce yield.
This creates an opportunity for holders to earn a “real rate of return” — meaning yield that beats inflation.
With U.S. inflation at 2.7% in June, the real yield from staked USDe (10.86% APY) stands at 8.16%, while USDS (4.75% APY) offers a 2.05% return after adjusting for inflation.
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