{"id":12299,"date":"2025-05-21T14:51:34","date_gmt":"2025-05-21T12:51:34","guid":{"rendered":"https:\/\/wsj-crypto.com\/?p=12299"},"modified":"2025-05-21T14:51:34","modified_gmt":"2025-05-21T12:51:34","slug":"yield-generating-stablecoins-reach-11-billion-accounting-for-4-5-of-market-a-new-analysis","status":"publish","type":"post","link":"https:\/\/wsj-crypto.com\/index.php\/2025\/05\/21\/yield-generating-stablecoins-reach-11-billion-accounting-for-4-5-of-market-a-new-analysis\/","title":{"rendered":"Yield-Generating Stablecoins Reach $11 Billion, Accounting for 4.5% of Market: A New Analysis"},"content":{"rendered":"

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Yield-generating stablecoins have surged to $11 billion in circulation, reflecting 4.5% of the overall stablecoin market, a significant increase from merely $1.5 billion and a 1% market share at the beginning of 2024.<\/p>\n

One of the top beneficiaries is Pendle, a decentralized protocol that allows users to secure fixed yields or speculate on changing interest rates. Pendle now makes up 30% of the total value locked (TVL) in all yield-generating stablecoins, approximately $3 billion, as stated in a report shared with Cointelegraph.<\/p>\n

Pendle highlighted that stablecoins comprise 83% of its $4 billion total value locked, a notable leap from under 20% just a year prior. In contrast, assets like Ether (ETH<\/a>), which formerly constituted 80%\u201390% of Pendle\u2019s TVL, have diminished to below 10%.<\/p>\n

Conventional stablecoins such as USDt (USDT<\/a>) and USDC (USDC<\/a>) do not transfer interest to holders. With over $200 billion in circulation and US Federal Reserve interest rates at 4.3%, Pendle estimates that stablecoin holders are forgoing more than $9 billion in annual yield.<\/p>\n

Pendle TVL distribution by assets. Source: Pendle<\/em><\/figcaption><\/figure>\n

Related:\u00a0<\/strong><\/em>Utilizing tsUSDe on TON for Passive Dollar Yield in 2025<\/strong><\/em><\/a><\/p>\n

Increasing regulatory transparency enhances stablecoins<\/h2>\n

The growth in yield-generating stablecoins<\/a> occurs alongside rising regulatory transparency under US President Donald Trump\u2019s administration.<\/p>\n

In February, the US Securities and Exchange Commission recognized yield-bearing stablecoins<\/a> as \u201ccertificates\u201d subject to securities regulation, instead of prohibiting them. This acknowledgement permits yield-bearing stablecoins to function under specific regulations, including registration, disclosure obligations, and investor safeguards.<\/p>\n

Proposed legislation like the Stablecoin Transparency and Accountability for a Better Ledger Economy (STABLE)<\/a> and\u00a0the Guiding and Establishing National Innovation for US Stablecoins (GENIUS)<\/a> indicate a positive trajectory.<\/p>\n

Meanwhile, Pendle anticipates that stablecoin issuance will double to $500 billion within the next 18 to 24 months. The company also expects yield-bearing stablecoins to seize 15% of this market with $75 billion in issuance (7x growth from $11 billion).<\/p>\n

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Yield-bearing stablecoins issuance. Source: Pendle<\/em><\/figcaption><\/figure>\n

Related:\u00a0<\/strong><\/em>PayPal to provide 3.7% yield on stablecoin balances: Report<\/strong><\/em><\/a><\/p>\n

Pendle redirects emphasis to yield market<\/h2>\n

Originally centered on airdrop farming, Pendle has transitioned to act as an infrastructure layer for decentralized finance yield markets.<\/p>\n

Ethena\u2019s USDe stablecoin currently represents around 75% of Pendle\u2019s stablecoin TVL. However, newer entrants like Open Eden, Reserve, and Falcon have raised the share of non-USDe assets from 1% to 26% over the past year.<\/p>\n

Pendle is also broadening its reach beyond Ethereum, planning to support networks like Solana and to integrate with Aave and Ethena\u2019s forthcoming Converge blockchain.<\/p>\n

Interest in\u00a0yield-generating strategies within the cryptocurrency arena<\/a>\u00a0has surged in recent years, propelled by both retail and institutional investors aiming to optimize returns on their digital assets.<\/p>\n

On May 19, Franklin, a hybrid cash and crypto payroll provider, declared the launch of Payroll Treasury Yield<\/a>, leveraging blockchain lending protocols to assist companies in gaining returns on payroll funds.<\/p>\n

Magazine: <\/strong><\/em>NBA player Tristan Thompson misses $32B in Bitcoin by accepting $82M contract in cash<\/strong><\/em><\/a><\/p>\n