SS #80 - Trump, Banks, and Crypto Clash Over Stablecoin Yields

📢 Sponsor | 💡 Telegram | 📰 Past Editions

Good morning.

The fight over stablecoin yields is heating up in Washington. As lawmakers work through the CLARITY Act, banks and crypto firms are clashing over whether digital dollars should be allowed to pay interest-like rewards. The decision could determine how competitive stablecoins become against traditional bank deposits.

Enjoy the read!

Let us know what sort of coverage you would like to see from the new publication.

If you know anybody who would benefit from this content, please help us spread the word!

In Today's Edition:

• Headline: Trump, Banks, and Crypto Clash Over Stablecoin Yields

• Quick Bites: Stablecoin Inflows Rebound to $1.7B

• Yield of the Week: apyUSD’s 53.8% APY

You read and share. We listen and improve. Send us feedback at [email protected].

HEADLINE

State of play: Tensions are rising in Washington as the debate over stablecoin yields stalls the passage of the broader US crypto market structure bill, the CLARITY Act.

• President Trump accused major banks of trying to undermine the GENIUS Act, arguing Americans should be able to earn higher returns on stablecoin holdings.

• His comments followed a reported meeting with Coinbase CEO Brian Armstrong, who opposes proposals to ban stablecoin rewards.

• The dispute has delayed progress on the CLARITY Act, which would define regulatory responsibilities between the SEC and CFTC for digital assets.

Banking groups warn that 4% to 5% returns on stablecoins could pull large amounts of deposits away from traditional banks, while crypto companies argue that stablecoin rewards create better financial opportunities for consumers.

• Jamie Dimon has said that if stablecoins pay interest they should be regulated like banks, but White House digital asset advisor Patrick Witt rejected that logic.

• Patrick Witt notes that the GENIUS Act already prohibits issuers from lending or rehypothecating the underlying reserves.

• Meanwhile, Eric Trump has joined the debate by accusing large banks of lobbying to block stablecoin yields and protect their low interest rate model.

What’s Next: Negotiations between banks, crypto firms, and the White House are ongoing, but the key question remains whether yield on stablecoins will be restricted or allowed under the final bill.

Why it Matters: If allowed, it may attract deposits away from banks by offering higher returns. If restricted, it could limit one of crypto’s strongest consumer value propositions.

Our Take: Banks want stablecoins treated like bank accounts to avoid losing liquidity, while crypto firms see yield as a core feature that makes digital dollars attractive.

• The outcome will likely define how competitive stablecoins can become against the traditional banking system.

QUICK BITES

• Stablecoin payments startup Cyclops raises $8M.

• Sui joins stablecoin race with USDsui mainnet launch.

• Solana stablecoin volume hits record $650B in February.

• Ripple expands stablecoin payments stack for banks, fintechs.

• Stablecoin inflows rebound to $1.7B as Washington battles over yield rules.

YIELD OF THE WEEK

LP apyUSD: 53.8% APY

• apyUSD is Apyx’s yield bearing stablecoin that accrues yield from dividends generated by DAT preferred shares backing apxUSD. The pool currently holds ~$4.38M in liquidity.

• Yield is driven by dividend income streamed on-chain, with a 46.27% underlying yield, 5.63% PT yield, and 1.9% Pendle LP incentives.

• PT apyUSD offers 15.74% fixed APY if held to maturity on 18 Jun 2026.

Gauntlet eUSD Core Vault: 11.36% APY

• The vault accepts eUSD deposits and allocates capital across Morpho lending markets to optimize risk adjusted yield. Total deposits currently stand at ~$1.26M eUSD.

• Capital is primarily deployed into WBTC/eUSD, wstETH/eUSD, and ETH+/eUSD markets, with utilization near 100% across most allocations.

• Yield is generated from lending demand and borrowing activity in these collateralized markets.

sUSDe–USDC Liquidity Pool: 13.47% APR

• This pool provides liquidity for the sUSDe–USDC pair with a 0.01% fee tier. TVL currently stands at ~$11.48M.

• LP earn yield from trading fees generated by swaps between sUSDe and USDC. Returns depend on pool activity and trading demand.

• The current price is 1.220658 USDC per sUSDe. Liquidity providers must deposit both assets within a defined price range to earn fees.

If you enjoy reading this issue, please consider subscribing. It takes 1 minute of your time, but it would mean the world to us 🙇

Disclaimer: All the information presented in this publication and its affiliates is strictly for educational purposes only. It should not be construed or taken as financial, legal, investment, or any other form of advice.